IRA RMD
Hi,. I have a client who’s spouse just passed away. Her spouse was 73 and already taking RMDs. The spouse is the sole beneficiary of the account but is only 68. She has her own IRAs and they are larger than her spouse’s. That being said, she still needs to take money out to live on. Is she better off using a beneficiary IRA for the spouse’s accounts or assuming ownership? Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2021-07-22 20:31
There is no reason to maintain the IRA as inherited. She is over 59.5 and can take distributions from her own IRAs without penalty as needed, but also under RMD age so she can do the spousal rollover to eliminate the need for beneficiary RMDs starting next year. Therefore, it is best to assume ownership of the inherited IRA. If spouse did not complete his 2021 RMD before passing, she must complete it, either from the beneficiary IRA before assuming ownership or after assuming ownership from the owned IRA. Also, no reason after assuming ownership she could not transfer the IRA into another of her already owned IRA accounts.
Permalink Submitted by Amy Luukko on Thu, 2021-07-22 20:35
This is the answer I was 95% sure of but just needed that confirmation. I appreciate it!