Have You Recently Inherited a Retirement Account?

In 2019, the “SECURE” (Setting Every Community Up for Retirement Enhancement) Act substantially revised federal requirements for withdrawing funds from retirement plans such as Individual Retirement Accounts (IRAs). These changes impacted both the timing of withdrawals and the amounts to be withdrawn, commonly known as Required Minimum Distributions (or RMDs).

One such change was to allow most beneficiaries of accounts inherited after December 31, 2019 to defer Required Minimum Distributions until the tenth year following the year of death.  At that time, all funds in the account needed to be withdrawn. For example, persons inheriting an IRA in 2020 needed to withdraw all funds by December 31, 2030, thus excusing Required Minimum Distributions for the years 2021 through 2029.

Unfortunately, recent regulations proposed by the U.S. Treasury remove that option in some cases, and restore the requirement to receive annual Required Minimum Distributions beginning in the year after the account is inherited.

If you inherited a retirement account after 2019 from someone other than your spouse (since beneficiary spouses generally roll the inherited funds into their own IRA) and have not taken distributions, these new regulations may apply to you. Please contact your Anchin Relationship Partner to evaluate whether the regulations impact your own Required Minimum Distributions.