An individual designates their estate as the beneficiary of their IRA. The individual dies at age 68 (before Required Beginning Date). What is the required distribution period for the IRA assets?

Answer options:

10 years (10-Year Rule)

5 years (5-Year Rule)

Life expectancy of the oldest beneficiary of the estate.

Life expectancy of the decedent.

How to approach this question

Identify Beneficiary Type (Estate = Non-Designated). Identify Timing (Before RBD). Result = 5-Year Rule.

Full Answer

B.5 years (5-Year Rule)✓ Correct

IRC §401(a)(9). If the beneficiary is not an individual (e.g., an estate), there is no 'designated beneficiary'. If death occurs before the Required Beginning Date (RBD), the entire account must be distributed within 5 years.

Common mistakes

Applying the 10-year rule which is for most non-spouse individuals.

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