Spouse Remaining a Beneficiary of Roth IRA

The recent questions involving a spouse remaining a beneficiary rather than rolling over to own Roth raises this question for me. Other than remaining a beneficiary to avoid a penalty on withdrawals in certain situations, would it not always be beneficial to remain a beneficiary if the deceased spouse was under 701/2.

(1) No RMD’s would be required until the deceased would have reached age 701/2.
(2) Any younger beneficiaries of the beneficiary spouse could use their own ages to calculate RMD’s rather than continue the spouse beneficiary’s remaining single term life.
(3) Since a Roth owner has no RBD, it seems that (2) would still be true even after RMD’s were required by the beneficiary spouse.

Is this thinking flawed ?

Ed C.



Yes, my reasoning is flawed, since I neglected the fact that a designated beneficiary of an IRA owner (spouse that rolls over to own IRA) can use their own lives to calculate RMD’s. So a spouse would choose to remain a beneficiary with a Roth only if under 591/2, and the 10% penalty would be levied on withdrawals if rolled over. I believe this could happen in the following situations if inheriting spouse under 591/2:

(a) Deceased spouse did not satisfy 5 year holding, and inheriting spouse withdraws earnings which would be penalized (and taxed).

(b) Deceased spouse had conversions that were not held for 5 years, and if withdrawn would be penalized. Would this still apply to each conversion, and still be levied if a Roth had been established for at least 5 years?



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