By now, you’ve learned that when a trust inherits an IRA, several layers of rules come into play — from see-through status to trust type and beneficiary class. The final big piece is understanding Required Minimum Distributions (RMDs) and how they differ depending on the type of IRA and the timing of the IRA owner’s death.

The Required Beginning Date (RBD): Why It Matters

The Required Beginning Date (RBD) is the date by which IRA owners must start taking RMDs from their traditional IRAs. Under current law, that’s April 1^st of the year after the owner reaches RMD age (now 73 for most people, and moving to 75 in 2033).

When the IRA owner passes away, whether they had started RMDs yet makes a big difference for the trust’s future payout schedule:

• If the owner died before their RBD: The trust beneficiary generally follows the five-year rule (if it’s a non-designated beneficiary, like a charity) or the 10-year rule (for designated beneficiaries).
• If the owner died after their RBD: The trust may need to take annual distributions based on the owner’s or the beneficiary’s life expectancy, depending on the trust type and the class of beneficiary.

Example:
Sarah, age 72, passes away before starting her RMDs. Her IRA is left to a see-through conduit trust for her two adult children. Because she hadn’t reached her Required Beginning Date and her children are non-eligible designated beneficiaries (NEDBs), the trust must empty the account by December 31^st of the 10^th year following Sarah’s death.

Traditional vs. Roth IRAs: Different Starting Lines

When it comes to inherited IRAs, traditional and Roth accounts play by different rules, especially around taxes and RMDs:

• Traditional IRA: The trust (or its beneficiaries) will eventually pay income taxes on withdrawals. RMDs may be required annually, depending on the timing of the owner’s death.
• Roth IRA: Roth IRAs have no RMDs during the owner’s lifetime, but once inherited, the beneficiary (or trust) must empty the account within 10 years. The good news? Those distributions are usually tax-free.

Example:
Mike leaves his Roth IRA to a conduit trust for his daughter, Ava. Even though Ava doesn’t owe taxes on the withdrawals, the trustee must still distribute the full account within 10 years. Roth IRAs don’t escape the timing rules; they’re just gentler at tax time.

Sub-Trusts and AMBTs: Special Cases to Know

Some trusts split into sub-trusts after the IRA owner’s death – for example, one for each child or grandchild. When that happens, each sub-trust’s payout schedule depends on its specific beneficiaries. So, if one sub-trust benefits an eligible designated beneficiary (EDB), that portion might qualify for a longer stretch period.

Another exception involves Applicable Multi-Beneficiary Trusts (AMBTs): special trusts for disabled or chronically ill beneficiaries created under the SECURE Act. AMBTs can be treated as conduit trusts, allowing IRA payouts to be based on the lifetime of the disabled or ill person, rather than the standard 10-year rule.

That’s a huge advantage for families managing special needs planning.

Putting It All Together

If you’ve made it this far in the series, you’ve now seen how the pieces connect:

1. Your trust must qualify as see-through to avoid the five-year liquidation rule.
2. The trust’s type (conduit vs. discretionary) sets whether distributions pass straight through or can be held inside.
3. The class of beneficiaries (eligible, non-eligible, or non-designated) determines how long funds can stay in the IRA.
4. And now, RMD timing decides when withdrawals must begin and how quickly the account must be depleted.

Each of these layers builds on the next — and the order matters.

Coming Up in Part 5:
We’ll finish the series with a look at unique trust structures — like AMBTs, sub-trusts, and trusts for minor children — and how to navigate blended families or special-needs cases under current law.