Section 401 of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 modified the required minimum distribution (RMD) rules for designated beneficiaries who aren’t surviving spouses. This modification became effective to inherited qualified contribution plans or individual retirement accounts (IRAs) beginning in 2020. The U.S. House of Representatives Ways and Means Committee Report 116-65 Part 1 provided the reasoning behind the change: Not taxing the contributed wages nor the income from this creates a tax subsidy for retirement savings that’s intended to encourage individuals and families to spend less during their working years and increase their saving for retirement. Moreover, this tax subsidy for retirement savings should decrease during the retirement of the individual and the surviving spouse, except in the case of certain other beneficiaries.


There are no changes to the RMD rules in the case of a sole designated surviving spouse. Those designated beneficiaries who aren’t surviving spouses, in general, will be required to distribute the plan funds within 10 years after the owner’s date of death. As a result, the funds can’t be stretched over the life expectancy of the beneficiary unless that individual qualifies as an eligible beneficiary. To be eligible, the individual must be at least one of the following:

  1. The surviving spouse of the IRA owner,
  2. Disabled,
  3. Chronically ill,
  4. No more than 10 years younger than the IRA owner, or
  5. A child of the IRA owner who hasn’t reached the age of majority.

Internal Revenue Code (IRC) §72(m)(7) defines a disabled person as someone who is unable to perform substantial gainful activity because of any medically determined physical or mental impairment that can be expected to either end in death or exist for a long, continued, and indefinite time. Furthermore, proof of the disability must be provided as prescribed by the Secretary of the Treasury. Substantial gainful activity is defined as an activity, or a comparable activity, in which the individual customarily engaged prior to the beginning of the disability (or prior to retirement if the individual was retired at the time the disability began). Reg. §1.72-17(f) further provides that consideration is given to other factors, such as the individual’s education, training, and work experience.

The House Ways and Means Committee report states that a chronically ill individual falls within the meaning as given for qualified long-term care insurance (i.e., IRC §7702B(c)(2)), which is any individual who:

  1. Is unable to perform (without substantial assistance from another individual) at least two activities of daily living (such as eating, using the toilet, transferring, bathing, dressing, and continence) and for an indefinite period (expected to be lengthy in nature) due to a loss of functional capacity,
  2. Has a level of disability similar (as determined under regulations prescribed by the Secretary in consultation with the Secretary of Health and Human Services) to the level of disability described above requiring assistance with daily living based on loss of functional capacity, or
  3. Requires substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.

A child is defined as one who hasn’t reached the age of majority, which is state specific. Most states define majority to be 18 years of age, with a few notable exceptions, such as Mississippi (age 21) as well as Alabama and Nebraska (age 19).

In the case where a child hasn’t reached the age of majority, the pre-2020 RMD calculation rules apply through the year that the child reaches the age of majority. After attaining majority, the 10-year rule applies.


Janice is 15 years old when her mother dies in 2021. She’s the sole designated beneficiary on her mother’s IRA and lives in a state where the age of majority is 18. Because Janice is a minor, she would take her first RMD when she is 16 (the year following her mother’s death). Her life expectancy is 69.0 from the Single Life expectancy table for age 16 of the final regulations (TD 9930) published in the Federal Register on November 12, 2020, for distribution calendar years beginning on or after January 1, 2022.

When Janice turns 18, it’ll be the last year that she can use the life expectancy factor for computing her RMD amount. The 10-year rule begins when Janice turns 19. Under the 10-year rule, Janice wouldn’t be required to take a distribution from the IRA until she turns 28. Yet if Janice distributed the entire amount at 28 years old instead of throughout the 10 years, that could put her in a higher tax bracket for tax planning purposes if that amount is large enough.

If Janice dies after attaining majority but before the end of the 10-year period, her successor beneficiary will have to withdraw the remaining IRA assets over what’s left of Janice’s 10-year period. The period doesn’t restart for the successor beneficiary.

If Janice dies before attaining the age of majority, the 10-year payout to her successor beneficiary will begin the year after Janice’s death. The successor beneficiary must also withdraw the RMD for the year of Janice’s death if it wasn’t withdrawn prior to her death.


The House Ways and Means Committee provides an example for a disabled child. In this case, the child continues to be classified as a child after reaching the age of majority. Therefore, if a disabled child of an IRA owner is an eligible beneficiary of a parent who dies when the child is age 20, the child continues to use the Single Life expectancy table from the final regulations for determining his or her life expectancy in calculating the RMD.

If the child dies at age 30, however, the disabled child’s remaining beneficiary interest must be distributed by the end of the 10th year following the death—even though 54.1 years remain in the measurement period. The 54.1 (64.1–10) years is the remaining life expectancy of the child at the time of death, which is:

  • 64.1 (the life expectancy from Table 1 of the final regulations for the child’s age in the year after the IRA owner’s death, i.e., 21 years old), less
  • 10 (the number of years the child survived the IRA owner).

If a child is an eligible beneficiary based on having not reached the age of majority before the IRA owner’s death, the 10-year rule applies beginning with the earlier of the date of the child’s death or the date that the child reaches the age of majority. The child’s entire interest must be distributed by the end of the 10th year following that date.

© 2021 A.P. Curatola

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