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. Under what circumstances will a contingent beneficiary receive an insurance payout?

    Learn the different types of contingent beneficiaries and what conditions must be met for these beneficiaries to receive ...
  2. What happened to Nathan Rothschild's estate after his death?

    Learn more about the Rothschild fortune and the business operations that brought this family substantial success in finance ...
  3. How risky is a straddle?

    Learn how options traders use long and short straddles to potentially profit from a market regardless of the direction of ...
  4. Do options make more sense during bull or bear markets?

    Understand how options may be used in both bullish and bearish markets, and learn the basics of options pricing and certain ...
RELATED TERMS
  1. Catastrophe Equity Put (CatEPut)

    Catastrophe equity puts are used to ensure that insurance companies ...
  2. Open Trade Equity (OTE)

    Open trade equity (OTE) is the equity in an open futures contract.
  3. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  4. Elder Care

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

    Definition of Gold IRA
  6. Eligible Transfer

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

You May Also Like

Related Articles
  1. Options & Futures

    Options and Roth IRAs: Do's and Don'ts

  2. Options & Futures

    Trade Covered Calls On High Dividend ...

  3. Mutual Funds & ETFs

    How do I invest or trade market indicators?

  4. Professionals

    Are Longevity Annuities in 401(k)s a ...

  5. Trading Strategies

    Top Day Trading Instruments

Trading Center