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Death-Claim Procedures on Inherited/Stretch IRAs

Death-Claim Procedures on Inherited/Stretch IRAs

In January, in response to implementation of the SECURE Act, EquiTrust temporarily suspended processing death claims as Inherited IRAs if the owners’ deaths occurred in 2020.  The suspension has been lifted and guidelines established. 

For IRA Owner Deaths occurring on or after January 1, 2020, there are two categories of beneficiaries: “Eligible” and “Ineligible” beneficiaries. 

  • Eligible beneficiaries are able to act under the previous rules for stretching an IRA, can “stretch” their death-claim portion and will be required to take an RMD based on their single-life expectancy. 
  • Ineligible beneficiaries cannot “stretch” the money over their lifetime; however they can “Inherit” the death-claim portion and grow their portion tax deferred without required distributions for up to 10 years from the date of death – at which time they will be required to have the entire value of the IRA either distributed or (at a minimum) taxed.

Linked here are two updated forms for death-claim processing: the Death Claim form and Election to Stretch/Inherit form.  These provide EquiTrust options for death claims under the SECURE Act. 

Also attached is a new IRA Beneficiary Guideline piece to help you and your clients understand death-claim options under the SECURE Act.   

Sales of new Inherited/Stretch IRA cases continue to be suspended at this time.     

If you have any questions please call EquiTrust Sales Support at 866-598-3694.  Or email [email protected].

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