RMD calc off the Jt table -spouse more than 10yrs younger | Ed Slott and Company, LLC

RMD calc off the Jt table -spouse more than 10yrs younger

We have a client who has been calculating his RMD's off of the Joint life table because his wife at the time was more than 10yrs younger. Our client is now divorced and will be updating his beneficiaries to remove his ex-wife.

1) I believe even if he updates his beneficiary today, the 2021 RMD will remain the same as what it was calc on 1/1/2021?
2) If #1 is true, when does our client need to update his beneficiary where he would no longer use the Joint life table?

  • Not correct. The former spouse will not be treated as the beneficiary for this year if the beneficiary is changed per P. 8 of Pub 590 B copied below. Therefore, at this point in the year, he must make a decision whether he wants the new beneficiary to receive the IRA if he passes, or whether he prefers the lower 2021 RMD. If he changes the beneficiary in January, his lower 2021 RMD from the joint table can still be used.
  •  "However, if you get divorced during the year and change the beneficiary designation on the IRA during that same year, your former spouse won't be treated as the sole beneficiary for that year."

Just so I understand...Jane is more than 10yrs younger than husband, John1/1/2021 John's RMD was calc using the Joint life table3/1/2021 divorced12/2021 Removing Jane and naming a non-spouse or his estate as the primary beneficiary in which Jane will no longer be a primary or contingent beneficiaryJohn's 2021 RMD will have to be recalculated using the Uniform table?I would assume that we would need to recaluate John's 2021 RMD using the Joint table no matter what?am I correct or just confused on this?    

Would like to revisit this...Now that the client is divorced (12/2021), he still has his ex-wife listed on his IRA, he would now have to recalc his 2022 RMD and future RMDs from the Uniform table, correct?

Yes, he must use the Uniform Table for his 2022 RMD and beyond because his marital status on 1/1 is single. He can also change the beneficiary now and that would not affect his 2022 RMD. 

Basically correct. Removing Jane this year would result in the Uniform Table applying for 2021. In that case, the difference between the Uniform Table RMD and whatever amount has already been distributed will have to be distributed before year end. On the other hand, if Jane is not removed until January, the joint life table RMD would still be correct for 2021, but not for 2022.

 

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