RMD calculation for a non-spouse beneficiary

[Ryan Walter]

I am trying to determine the proper calculation for an RMD for a non-spouse beneficiary.

The original account holder was a greater than 5% owner and was taking RMDs before the time of his death. His sole beneficiary, his wife, became the account holder and opted to leave the funds in the plan. She continued to take RMDs using the uniform life table based on her D.O.B.

This beneficiary, now the account holder, died and the account fell to her sole beneficiary, her daughter. Her daughter opted to leave the funds in the plan as well. The beneficiary was 88 at the time of her death in 2017, in 2018 she would have been 89. Using the single life table, this results in a factor of 5.9. The daughter was 68 in 2018 which results in a factor of 18.6 using the single life table.

Is the single life table the correct one to use in this situation?

If so, am I correct to use the greater factor of the two and reduce the 18.6 factor by one each following year?

If not, what is the proper way to calculate the RMD for the daughter?

[Mike Preston]

Don't have time to look at all of my materials but I think the distribution pattern established by the initial beneficiary establishes the longest time frame and that is not reset in any way.  So, I'm not sure it is 5.9 or 18.6.

[Appleby]

On 1/17/2020 at 11:50 AM, Ryan Walter said:

I am trying to determine the proper calculation for an RMD for a non-spouse beneficiary.

The original account holder was a greater than 5% owner and was taking RMDs before the time of his death. His sole beneficiary, his wife, became the account holder and opted to leave the funds in the plan. She continued to take RMDs using the uniform life table based on her D.O.B.

This beneficiary, now the account holder, died and the account fell to her sole beneficiary, her daughter. Her daughter opted to leave the funds in the plan as well. The beneficiary was 88 at the time of her death in 2017, in 2018 she would have been 89. Using the single life table, this results in a factor of 5.9. The daughter was 68 in 2018 which results in a factor of 18.6 using the single life table.

Is the single life table the correct one to use in this situation?

If so, am I correct to use the greater factor of the two and reduce the 18.6 factor by one each following year?

If not, what is the proper way to calculate the RMD for the daughter?

Was his wife a participant under the plan? Or, just a beneficiary ?

[Ryan Walter]

His wife was only a beneficiary, never a participant.