Essential Tips for RMD Successor Beneficiaries

​Under the new SECURE Act of 2019 rules, Required Minimum Distributions (RMDs) for beneficiaries inherited after 2019 depend upon the date of death of the Participant. 
We added a sixth option in Step 1 to accommodate the 10-Year Rule, specifically, the “Successor Beneficiary” option. We now designate the Participant as the “Primary Beneficiary.” All follow-on beneficiaries are “Successor Beneficiaries.”

​Successor Beneficiaries to the Primary Beneficiary must follow the new 10-Year Rule wherein account custodians must distribute the total amount of the retirement account within ten years.

When a Successor Beneficiary dies during the 10-Year Rule payout period, the next Successor Beneficiary falls under the initial Successor Beneficiary’s 10-Year Rule (based on the date of death of the Primary Beneficiary). Effectively, there is no “10-Year Rule reset.”
The marginal tax rates come into play as distributions are made. ProTracker Software’s ProTracker Advantage® client relationship management (CRM) system documents the distribution decisions to assist the advisor in remembering the client's parameters. 
Learn more about calculating RMDs and documenting them here.