Spousal Inherited IRA v. Spousal IRA Rollover – 8 Year Age Difference

I have a question…we have married clients who are age 70 (he) and 62 (she). Both clients have IRAs. The 62 year old client just passed away. I know that the surviving spouse can rollover the decedent’s IRA into his IRA and the RMDs will begin (on the combined funds’ value) once he reaches 70.5. I also know that he can create an inherited IRA for the decedent’s IRA funds and does not have to begin taking RMDs until she would have been 70.5, but then has to take them according to the Single Life table if left in the Inherited IRA account. Is it possible for him to create an inherited IRA, receive his wife’s funds, allow them to grow for 8.5 years until she would have been 70.5, then roll them into his IRA account and use the Uniform Life table factor for future RMDs with the combined funds? It seems if this is possible, this would be the best strategy. Thanks for your help clarifying this issue.



Yes, this can be done and will present the longest tax deferral plan possible. He should plan to roll over the inherited IRA in the year his spouse would have reached 70.5. He is then treated as owning that inherited IRA for the entire year so his RMD that year would be calculated using the Uniform Table. He should be sure to name his own beneficiary on the inherited IRA ASAP, and because his beneficiary RMDs are not required to begin for several years, if he passes in that time his beneficiary will still receive a life expectancy stretch using the beneficiary’s age. It is important that he remember to do the eventual rollover when the time comes.



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