How do decedent's death date and account type determine RMD timing under 2026 rules?
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Executive summary
The timing and amount of required minimum distributions (RMDs) after a decedent’s death now hinge primarily on two facts: whether the owner died before or after their required beginning date (RBD), and the type of account and beneficiary involved. If the owner died before their RBD, most non‑eligible designated beneficiaries (NEDBs) generally only face the 10‑year payout rule; if the owner died on/after the RBD, beneficiaries often must take annual RMDs in years 1–9 plus exhaust the account by year 10 [1] [2].
1. How the date of death—before vs. on/after the RBD—reorders the rules
The IRS finalized a two‑tier approach: when an owner dies before their required beginning date (the RBD), a non‑eligible designated beneficiary can often rely on the 10‑year rule without annual minimums; when the owner dies on or after the RBD, the beneficiary must take annual RMDs for years 1–9 (based on life‑expectancy rules) and still empty the account by the end of year 10 [1] [2]. Industry guides illustrate this split with concrete examples showing materially different cash‑flow and tax outcomes depending solely on whether the decedent had already reached the RBD [3] [1].
2. Account type matters: Roths, traditional IRAs and employer plans behave differently
Roth IRAs and designated Roth accounts are treated specially: account owners have no lifetime RMDs, and the IRS deems every deceased Roth owner to have died before an RBD for the purpose of beneficiary rules—so inherited Roths are subject to the 10‑year rule but generally not annual minimum distributions [4] [1]. By contrast, traditional IRAs and pre‑tax workplace plans remain subject to the life‑expectancy plus 10‑year mechanics when the decedent died on/after their RBD [4] [1].
3. Year‑of‑death RMD: who must take it and when
The RMD for the year the owner died is the amount the owner would have been required to withdraw that year but did not; beneficiaries must cover that shortfall [4]. The IRS final rules and practitioner guidance make clear the collective obligation: beneficiaries may need to coordinate to satisfy any year‑of‑death shortfall [5]. Practical examples show beneficiaries can be liable for the owner’s missed RMD and that the distribution is typically taxed in the year it’s received [6] [5].
4. Multiple beneficiaries, trusts and pro‑rata apportionment—practical headaches
The final regulations require that any aggregate year‑of‑death RMD shortfall be apportioned across all the decedent’s IRAs based on relative balances, creating logistical challenges if beneficiaries lack visibility into all accounts or other beneficiaries [5]. Where multiple designated beneficiaries exist and separate inherited accounts are established by the deadline, each beneficiary can compute RMDs on their own life expectancy; otherwise administrability and tax timing get complicated [2] [5].
5. Transition timing and delayed applicability to 2026—why implementation matters
Although many of these rules were finalized in 2024, the IRS delayed the effective date of several proposed/related RMD changes until the 2026 distribution year to give plans, custodians and taxpayers time to implement systems and procedures [7] [8]. Industry advisories from law and trust firms underscore that implementation timing affects recordkeepers’ ability to apply new aggregation, annuity and Roth post‑death clarifications [8] [7].
6. Penalties, waivers and the practical tax impact for beneficiaries
SECURE 2.0 cut historic excess accumulation penalties and created limited waiver windows, but beneficiaries still face significant tax consequences if year‑of‑death RMDs aren’t taken; corrected shortfalls can reduce penalties if remedied quickly, and Form 1099‑R reporting will reflect the distribution year [6] [5]. Financial‑industry commentary warns beneficiaries that timing their first required withdrawals (for example, delaying a first lifetime RMD to April 1) can create concentrated taxable income in a single year [9].
7. Competing views, limitations and where the reporting is thin
Regulatory texts and industry commentary align on the before/after RBD split and Roth treatment, but practical questions remain: custodial coordination and the fairness of pro‑rata apportionment drew industry criticism as “not addressing beneficiaries unaware of other IRAs” [5]. The provided sources do not mention specific IRS procedural instructions for beneficiary coordination across multiple custodians or how frequently the IRS will grant penalty waivers in practice—available sources do not mention operational enforcement patterns beyond the statutory penalty and waiver language [5] [6].
Bottom line: the decedent’s death date (relative to the RBD) and the account type (Roth vs pre‑tax; IRA vs plan) determine whether beneficiaries take annual RMDs or can rely on a 10‑year window. The rules are now final in substance, but implementation and coordination challenges remain, and many practical details fall to custodians and beneficiary actions [1] [7] [5].