My slightly younger sibling is on Social Security Disability. She's my IRA beneficiary. Am I right that if I pass away first, as a disabled beneficiary she could spread distributions from my IRA over her lifetime instead of having to empty the account within 10 years of my death? What would she have to show the bank to prove she's entitled to lifetime distributions? I'm also her beneficiary. If she passed away before me, would I have to empty her IRA within 10 years or could I spread the distributions over my lifetime?

Disabled beneficiaries are exempt from the new law that requires inherited retirement accounts to be emptied within 10 years of the original owner's death.

But if your sister is less than 10 years younger than you, she'll qualify for an exemption even if she doesn't meet all the requirements to qualify as a disabled beneficiary — and so will you, says Ed Slott, a Rockville Centre tax accountant.

Here's why:

The new law exempts five classes of beneficiary from the new 10-year post-death payout requirement: surviving spouses; minor children (but not grandchildren) up to their age of majority; disabled individuals; chronically ill individuals; and beneficiaries who aren't more than 10 years younger than the original account owner. People qualifying for an exemption can empty inherited accounts over their life expectancies.

It sounds as if you and your sister are both in the fifth category.

And should you inherit her IRA, you'd get longer to empty it if she dies after age 72: When a deceased IRA owner had started taking required minimum distributions, an older beneficiary can take distributions over the deceased owner's remaining life expectancy. "That would be a longer life expectancy than your own," Slott says.

The bottom line

A new tax law applies to IRA beneficiaries.

More information

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