The SECURE Act ended the “stretch-IRA” for most beneficiaries who inherit IRAs. But there’s an exception for a designated beneficiary who is disabled or chronically ill. Who would this person be?

The definition of a disabled person is based the definition used for purposes of Social Security disability benefits. A person is disabled if unable to have substantial gainful employment. For purposes of being exempt from the 10-year rule for required minimum distributions applicable to beneficiaries who inherit from a person dying after 2019, the disability must be long term (not merely for a  12-month period used for Social Security purposes). The definition of a chronically-ill person is the same definition used by the Tax Code for long-term care contracts, meaning that the beneficiary is unable to perform at least two of five activities of daily living (e.g., bathing, transferring) or have a cognitive impairment requiring supervision for health and safety. Being chronically ill requires certification by a health care professional; being disabled does not.