Disability Distributions | Ed Slott and Company, LLC

Disability Distributions

We have a situation where person (under 59 1/2) rolled his PST to an IRA under total disability provisions and has been taking IRA distributions. Person how deceased. Primary beneficiary is wife who is 57 years old. Do the rules revert back where she must take SEPP until age 59 1/2 even though they've been living on the IRA with no restrictions?

No, all she has to do is have his IRA re titled in beneficiary form for her benefit. As an inherited IRA, there is no penalty for distributions she wishes to take, just ordinary taxes. When she reaches 59.5, she can make the IRA her own since she will then be exempt from penalty. With regard to required distributions while the account is in inherited status, the first RMD is not required until the year her deceased spouse would have reached 70.5.

Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.

I agree to the terms and services:

You may review the terms and conditions here.