Under the SECURE Act ten-year rule, which designation is exempt from the rule?

Under the SECURE Act ten-year rule, which designation is exempt from the rule?

• A. A group of nonspousal designated beneficiaries
• B. A surviving spouse
• C. A charitable remainder trust
• D. An individual beneficiary not a spouse

Answer: (B)

The main idea is that the SECURE Act sets a 10-year deadline for most inherited IRAs, but certain beneficiaries are exempt from that rule. A surviving spouse is the standout exemption because they can treat the inherited funds as their own. They have the option to roll the IRA into their own name or take distributions based on their own life expectancy, effectively bypassing the 10-year payout requirement. This preserves the traditional ability for a spouse to stretch or defer withdrawals like they would with their own retirement funds. Other designations—such as a group of nonspousal designated beneficiaries, a charitable remainder trust, or an individual beneficiary who is not a spouse—do not enjoy that exemption. They generally fall under the 10-year rule, meaning the inherited assets must be distributed within ten years of the original owner's death, subject to any other applicable rules.

The main idea is that the SECURE Act sets a 10-year deadline for most inherited IRAs, but certain beneficiaries are exempt from that rule. A surviving spouse is the standout exemption because they can treat the inherited funds as their own. They have the option to roll the IRA into their own name or take distributions based on their own life expectancy, effectively bypassing the 10-year payout requirement. This preserves the traditional ability for a spouse to stretch or defer withdrawals like they would with their own retirement funds.

Other designations—such as a group of nonspousal designated beneficiaries, a charitable remainder trust, or an individual beneficiary who is not a spouse—do not enjoy that exemption. They generally fall under the 10-year rule, meaning the inherited assets must be distributed within ten years of the original owner's death, subject to any other applicable rules.