Inherited Roth IRA - Options, Rules, and Required Minimum Distributions
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- Опубліковано 4 сер 2024
- In this video we will breakdown how to treat Inherited Roth IRAs (which differs from Inherited Traditional/Pre-Tax IRAs).
00:00 - Intro
00:38 - Tax Differences
01:22 - Beneficiary Types
03:23 - Eligible Designated Beneficiaries (Spouse)
05:45 - Eligible Designated Beneficiaries (Non-Spouse)
06:38 - Non-Eligible Designated Beneficiaries
07:27 - Non-Designated Beneficiaries
08:15 - Calls to Action
EDB - • RMDs for EDBs (Eligibl...
NEDB - • RMDs for NEDBs (Non-El...
NDB - • RMDs for NDBs (Non-Des...
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Great info and video
Appreciate the feedback, thanks!
If you mentioned children I missed it as far as what beneficiary category they fall into. Assuming I pass and my wife moves my Roth funds into her own Roth account, what happens once she passes as far as our children are concerned? Does my wife have to designate our children as beneficiaries before she passes or what? From your presentation, I assume that the children will have 10 years to empty the remaining Roth account while taking some funds annually from the Roth in years 1-9. Thanks
Great question!
Minor children are classified as EDBs, non-minor children are NEDBs. When she passes, if she named the kiddos as beneficiaries, they would get the money without wading through the probate process. If she didn't name them as beneficiaries and simply left the beneficiary designation blank or labeled her "estate" as the beneficiary, then the probate courts will generally split the account between the kiddos (ie. next of kin).
No RMDs if they fall into the 10-year rule (NEDB) because Roth IRAs don't have a Required Beginning Date (RBD). However if they are minors they would be considered EDBs and would have RMDs until reaching the age of majority (ie. 18/21). From here it's unclear if they would need to continue RMDs and/or liquidate by the 10th year of being an adult.
@@chrisdime Thanks Chris. The Roth rules may be clear to you professionals, but us mere mortals need a lot of assistance.
Tfs
If you are on disability and Inherited a Roth IRA,are you required to pay taxes to the IRS?
Great question! Whether you are on disability claim or not, distributions from an Inherited Roth IRA (generally) will come out completely tax free.
There are times when income taxes may apply to an inherited roth ira and I will link below to that explainer video (timestamp 9:01), I don't think being on disability claim would help you in that regard.