IRA BDA vs. Rollover IRA | Ed Slott and Company, LLC

IRA BDA vs. Rollover IRA

I have come across a situation where, in 2009, a spouse (husband deceased) received her husbands IRA into an IRA BDA account at Fidelity Investments from Vanguard Investments.
It would appear that she should have received it as a rollover into her Traditional/Rollover IRA.
Unclear whether the origin is Fidelity or Vanguard?
The account holder (wife) is 69 years old. No withdrawals/distributions have ever occurred from this account.
Is there a path to correct this?
What is the process to resolution?

If the deceased spouse was past their required beginning date, or would have reached their required beginning date between when they passed and now, and the remaining spouse did not take any RMD from the beneficiary account, the remaining spouse is deemed to have treated the account as their own.  Since the remaining spouse themselves has not reached their required beginning date there is nothing left to correct but to move the funds into an IRA in their own name.

  • Agree, with a small correction of 3 months. The sole surviving spouse must begin beneficiary RMDs by 12/31 of the year the decedent would have reached 70.5, which is 3 months earlier than the decedent's RBD. And if decedent would not have reached 70.5 by 12/31/2019, then 12/31 of the year the decedent would have reached age 72 is the deadline for the survivor to take a beneficiary RMD or default to ownership.
  • Since the age of the decedent was not stated, it is not clear whether the surviving spouse has defaulted to ownership by the end of 2019 or not. Either way, the surviving spouse will not have a 2020 RMD due to the CARES Act. Therefore, if the surviving spouse did not default to ownership at the end of 2019, the next year they could default to ownership is 2021. 
  • If the surviving spouse has already defaulted to ownership, they had no RMD due that year due to their age being under 70.5, and certainly no RMD for 2020.
  • Therefore, CARES layered on top of the Secure Act results in some important deadline changes and added complexity. To winnow this down, OP might provide us with the DOB of the deceased spouse.
 

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