Successor Beneficiary Inherited IRA: Why You Don't Get a New 10-Year Rule
A successor beneficiary is someone who inherits an IRA that was already inherited. The grandchild who inherits from a parent, who had inherited from a grandparent. The second spouse's kids. The contingent beneficiary named on an inherited IRA. It happens constantly, and the rule that governs it surprises almost everyone it touches: the 10-year clock does not restart. It keeps running from the original owner's death, and you inherit whatever time is left.
The rule, stated plainly
Under the SECURE Act final regulations, a successor beneficiary of a non-eligible designated beneficiary (the 10-year-rule group) must empty the account by the end of the original 10-year period. Not ten years from when you inherited. Ten years from when the original owner died. If annual RMDs applied to the prior beneficiary, because the original owner died on or after their required beginning date, those continue for you too, in years 1 through 9 of that same original window.
The logic is unsentimental. The IRS treats the 10-year rule as one distribution schedule attached to the account, not a fresh benefit for each new holder. The account had a deadline before you arrived. It still has that deadline.
A worked timeline: grandfather dies in 2022
Grandfather dies in 2022 at 78, past his required beginning date. His daughter inherits a $400,000 traditional IRA. Her 10-year deadline: December 31, 2032. Annual RMDs are required each year because grandfather died after his RBD.
The daughter takes her RMDs for five years. In 2027 she dies, and her son, the named successor beneficiary, inherits the remaining $300,000. Here is where the surprise lands: he does not get until 2037. He gets until December 31, 2032, the original deadline, and he must continue the annual RMDs in the remaining years. Five years of runway, not ten. If he assumed a fresh clock and took nothing in 2028, he has missed an RMD and owes the excise tax on it.
Why this is the rule that punishes procrastination
Most inherited-IRA mistakes are fixable with money. This one is not, because the lost resource is time. Every year the first beneficiary holds the account, the successor's window shrinks, and the successor usually does not know the window exists. The daughter in the example had no legal duty to brief her son on the 2032 deadline. The custodian will send RMD reminders, but custodians remind about RMDs, not about the final deadline.
My advice to anyone holding an inherited IRA: write down the deadline and the RMD schedule, and tell your successor beneficiary where the note is. A one-page letter beats a surprised heir. If the account is large, a properly drafted see-through trust can control the flow and the messaging at the same time, though the 10-year deadline applies regardless.
The number to remember from the top
December 31 of the tenth year after the original owner's death. That date is set the day the original owner dies, and nothing that happens afterward, no second inheritance, no new beneficiary, moves it. If you inherit an inherited IRA, your first job is to find that date.
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Use the free inherited IRA calculatorFrequently asked questions
What is a successor beneficiary of an inherited IRA?
A successor beneficiary inherits an IRA that was already inherited, for example a grandchild inheriting from a parent who inherited from a grandparent. They step into the shoes of the beneficiary they inherited from, including the distribution schedule.
Does the 10-year rule restart for a successor beneficiary?
No. The successor must empty the account by the end of the original 10-year period measured from the original owner's death. There is no fresh 10-year clock.
Do annual RMDs continue for a successor beneficiary?
Yes, if they applied to the prior beneficiary. When the original owner died on or after their required beginning date, the successor must continue annual RMDs in the remaining years of the original window.
Can a successor beneficiary be an eligible designated beneficiary?
Even someone who would otherwise qualify, like a minor child, is subject to the 10-year rule as a successor. The only exception is a surviving spouse of the original beneficiary.
How do I plan for successor beneficiaries?
Name contingent beneficiaries on the inherited IRA and document the deadline and RMD schedule for them. A see-through trust can control the flow for larger accounts, but the 10-year deadline applies regardless.
Related: Do I Have to Take Annual RMDs During the 10-Year Rule? · Eligible Designated Beneficiary: Who Keeps the Stretch Under the SECURE Act · What Happens If You Don't Empty an Inherited IRA in 10 Years? The Penalty · Missed an Inherited IRA RMD? The 5329 Penalty Fix
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