3905.1 / How does an IRA beneficiary satisfy the minimum distribution requirements if the original account owner failed to take their entire required distribution in the year of death when there are multiple beneficiaries?

Final regulations released in 2024 offer significant flexibility when an account owner names multiple beneficiaries. In these cases, when the original owner fails to take their full RMD prior to death, the beneficiaries can structure the RMD as they see fit.

In other words, the RMD can be distributed to any beneficiary.¹ One single beneficiary could take the entire RMD or the RMD can be divided in any way among the multiple beneficiaries.

Planning Point: Because these distributions are fully taxable—and beneficiaries may be in different tax brackets. It may be beneficial to allocate more of the RMD to beneficiaries in the lowest tax brackets.