IRA Beneficiary Payout Options - The Old Rules vs The New Rules

on "March 18, 2021 3:52 pm"

As you have most likely heard, in 2020 we had some of the most comprehensive changes to IRAs as we have had in over 15 years. While a few of the changes leaned towards positive, the biggest change became a huge negative and the target was IRA beneficiaries. This program will focus on which options are available to which beneficiaries depending on the IRA owner's date of death.

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IRA Beneficiary Payout Options - The Old Rules vs The New Rules
Tuesday, April 6, 2021 • 5:00 am - 6:30 am HST • OnDemand playback is included

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In 2002, the IRS extended the payout to beneficiaries based on their age the year after the owner's death and their Single Life Expectancy. This helped beneficiaries who were mostly stuck with a 5-year payout before 2002 to possibly spread out inherited funds over a a 20-30 year payout greatly reducing the amount they had to claim as income each year.

Beginning for those inheriting IRA funds in 2020 and beyond, that longer payout came to a screeching halt for most beneficiaries. For non-eligible designated beneficiaries the longest payout is 10 years - regardless of their age or the IRA owner's age when he/she died.

The most confusing aspect of this change is the transition of Single Life Expectancy to a 10-year Payout. We will delve into who is "grandfathered" by the old rules and who must use the new rules.

Covered Topics

  • What are the 3 new categories of beneficiaries to determine payout options?
  • Which beneficiaries are 'grandfathered' under the old rules for the Single Life Payout?
  • What obligations do we have to monitor a 10-year payout option?
  • Who must take the RMD of the deceased owner in the year of death?
  • Why is it so important that we report death distributions correctly?
  • How do we set up an Inherited IRA properly?
  • What happens to a beneficiary in Single Life payout dies after 2019?
  • What happens if the beneficiary does not close his/her Inherited IRA in 10 years?
  • How do the new payout rules affect a trust or estate beneficiary?
  • What are the best options for spouse beneficiaries?

Who Should Attend?

Everyone who answers members or beneficiary questions should attend this informative Webinar including: Member Service Reps, Operations Dept., Call Center Reps, Legal Counsel, Trust and Investment Officers, Branch Managers and anyone who would like a thorough discussion of the most legal aspects of IRA payouts after the owner's death.

About The Presenter

Patrice M. Konarik is president of Sunwest Training Corp. founded over 25 years ago and is located in the Texas Hill Country near San Antonio, Texas. With over 35 years in the financial industry, Patrice has focused her expertise on the retirement account area and is currently providing live training and Webinars on IRAs and Health Savings Accounts on a nationwide basis. She has a BS in Management Science from New York's Binghamton University. Many financial associations and other organizations use her as their main source for training on these complicated topics.