Death Before the RBD (Required Beginning Date). If the owner of an IRA dies before the RBD (or at any age for a Roth IRA owner) one of two rules apply. The first rule (five-year rule) requires the entire benefit to be distributed on or before December 31 of the year in which the fifth anniversary of the owner’s death occurs [IRC Sec.401(a)(9)(B)(ii); Reg. 1.401(a)(9)-3, Q&A-1]. The five-year rule always applies if there is no designated beneficiary. Under the second rule, the life expectancy rule (or exception to the five-year rule), RMDs to a designated beneficiary must begin by December 31 of the year after the year in which the owner died if the beneficiary is not the owner’s spouse [IRC Sec.401(a)(9)(B)(iii); Reg. 1.401(a)(9)-3, Q&A-3(a)].
Such distributions must be made over the beneficiary’s single life expectancy (from Table T1002) based on his or her age at the end of the year following the year of the account owner’s death. That life expectancy figure is then reduced by one to calculate the RMD for the following year, by two to calculate the RMD for the year after that, and so on for each subsequent year.
Also note, a Spouse is the only beneficiary that can roll over and defer an IRA…everyone else must start taking distributions.