Spouse inherits IRA from husband – RMD question

Submitted by Philip Detlefs on Thu, 2019-02-07 20:45

Husband passed away at age 67. The wife (age 53) inherited his IRA and rolled it into an inherited IRA. Now she is about to turn 60 and it is still an inherited IRA. The husband would have been age 72 now. She has never taken an RMD. It’s my understanding that as long as it is an inherited IRA and she is under the age of 59 1/2 she could take withdrawals without penalty. However, it also my understanding that if she leaves it as an inherited IRA she would also be required to take an RMD when the deceased husband would have turned 70 1/2. Is this correct? Also, if she elects to now roll the inherited IRA over into a traditional IRA will she be able to wait until she turns 70 1/2 to start RMDs?



Submitted by Alan - IRA critic on Thu, 2019-02-07 23:02

You are correct that she should have taken beneficiary RMDs starting in the year husband would have reached 70.5. Those late RMDs need to be calculated and distributed now, and a Form 5329 filed for each year to request that the penalty be waived. Then she should notify the custodian that she is electing to assume ownership of the inherited IRA. That will eliminate the need for a 2019 RMD because she will be deemed to have owned the IRA the entire year. She should not take a distribution from the inherited IRA with the intent of rolling it over because a distribution from the inherited IRA will include a 2019 beneficiary RMD which can otherwise be avoided, and her RMDs would not begin again until 70.5.



Submitted by David Mertz on Fri, 2019-02-08 02:29

  • Does making up the late RMDs undo the account to defaulting to owned status for not taking RMDs?
  • As evidenced by not taking RMDs, the wife apparently does not presently need the money.  Why not just allow the account remain defaulted to owned status and not make up the RMDs?  Penalty-free distributions will be permitted when the wife reaches age 59½ in a year or two.  (I’m not sure how she is about to turn 60 if she was age 53 five years ago when her husband died.  Seems she would be about age 58 at present.)


Submitted by Alan - IRA critic on Fri, 2019-02-08 03:47

Good point as I overlooked the default rule. All she needs to do now is have the IRA retitled as owner to reflect the actual status.



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