If an IRA owner dies after starting required minimum distributions (RMD) but the spouse is under 70.5, can the spouse roll over the IRA into his/her own IRA, and stop RMDs until age 70.5?

By Denise Appleby AAA
A:

If the IRA owner dies after the required beginning date (RBD) and his/her beneficiary is his/her spouse, the spouse beneficiary may either:

  1. Begin death distributions by Dec 31 of the year following the year the IRA owner dies. In this case, the distributions must be calculated using the longer of the deceased's remaining life expectancy or the spouse's life expectancy. If the surviving spouse's life expectancy is being used, it must be determined on a recalculated basis. In other words, the tables must be visited each year to determine the factor, a life expectancy figure found in the IRS life expectancy tables. If the deceased's life expectancy is being used, it must be determined on a non-recalculated basis or in the year of death, subtracting one from the factor for each subsequent year.
  2. Treat the IRA has his/her own and do not begin required minimum distribution (RMD) amounts until he/she reaches her RBD.

The spouse beneficiary options apply only if the spouse is the sole primary beneficiary of the IRA. If the spouse is one of several primary beneficiaries, then he/she may be subject to the non-spouse beneficiary options should he/she choose to keep the assets in an inherited IRA. However, he/she may distribute and roll over his/her portion of the assets to his/her own IRA and need not begin distributions until his/her RBD.

(For more on RMDs, check out Avoiding RMD Pitfalls, IRS Modifies Separate Accounting Rules as well as Inherited Retirement Plan Assets – Part 1 and Inherited Retirement Plan Assets – Part 2.)

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. How do deferred tax assets help in meeting retirement goals?

    Learn how tax deferred assets can help individuals achieve long-term financial goals such as retirement and how they differ ...
  2. What are the best ways to pay less income tax?

    Learn about reducing your income tax burden by contributing to an employer-sponsored retirement plan or IRA, and see what ...
  3. What is the difference between a stop loss order and a limit order?

    Learn how to manage losses and reduce risk in volatile markets while reviewing the differences between stop-loss orders and ...
  4. Who does Warren Buffett plan to bequeath his estate to?

    Find out how much Warren Buffett is leaving for his heirs and how he wants the funds invested after his death. Learn about ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Gold IRA

    Definition of Gold IRA
  3. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  4. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  5. Multibank Holding Company

    A company that owns or controls two or more banks. Mutlibank ...
  6. Short Put

    A type of strategy regarding a put option, which is a contract ...

You May Also Like

Related Articles
  1. Options & Futures

    Give Yourself More Options With Real ...

  2. Options & Futures

    The Future Is Now: All About Futures ...

  3. Options & Futures

    How To Protect A Short Position With ...

  4. Options & Futures

    How To Build Valuation Models Like Black-Scholes ...

  5. Options & Futures

    A Detailed Look Into China's Options ...

Trading Center