Spousal RMD Election Requirement

Husband passed away in 2017. Husband had a 403(b) at a University in the US.

Husband was 62 at death and wife was the same age. Wife is now 65.

Wife has not made any election on the 403(b) and the account remains unchanged.

Is there a time requirement for the wife to elect to roll it into an inherited account or into her own account? (rolling it into her own IRA/account vs. an inherited IRA/account)? I assume the custodian (Fidelity) is aware that the account holder is deceased (but they may not be).

Thank you.



Deadlines depend on the plan provisions. Some plans still specify that the 5 year rule applies for deaths prior to the RBD. Others may have an election deadline of the end of the year following the year of death (2018) to elect either LE or the 5 year rule and will usually indicate the method that will apply if no election is made. If the 5 year rule happens to apply here, then the surviving spouse has until 12/31/2021 to do the spousal rollover to her own IRA. If this deadline is also missed AND the 5 year rule applies, the spousal rollover cannot be made because in the 5th year the plan balance is treated as an RMD. While the surviving spouse is more likely to fall under the LE rule which would not require an RMD until the year husband would have reached 72, she is taking risks by not acting, and in addition she probably has not named her own beneficiary or even reported his death.  Yet another risk if she ignores this plan long enough and she moves and does not change addresses or claim the account, it could be escheated to the state.  She needs to proceed with the spousal rollover before any of these contingencies occur.



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