SPOUSAL ROLLOVERS AND SUCCESSOR BENEFICIARIES: TODAY’S SLOTT REPORT MAILBAG | Ed Slott and Company, LLC

SPOUSAL ROLLOVERS AND SUCCESSOR BENEFICIARIES: TODAY’S SLOTT REPORT MAILBAG

By Ian Berger, JD
IRA Analyst
Follow Us on Twitter: 
@theslottreport


Question:

Good afternoon. We have a client who was 19 years younger than her spouse. He passed away this year. We are planning to keep this as an inherited IRA for now. Can we move the assets to her own IRA at any time?

Thank you, stay safe and have a great day,

Julie


Answer:

Hi Julie,

Yes, a surviving spouse can roll over the deceased spouse’s IRA to her own IRA at any time after death. Often, younger surviving spouses delay doing a spousal rollover until they reach age 59 ½. That’s because, as long as the IRA remains an inherited IRA, the surviving spouse can take a distribution from it before 59 ½ without the 10% early distribution penalty.


Question:

I was in your workshop in February, and I just now have an issue that I would like a clarification.

Vince passed away in 2008, his daughter inherited the IRA and is stretching it over her single life expectancy. She passes away in May of 2020. Is her husband (the listed beneficiary of her stretch IRA) able to be an “eligible designated beneficiary” and continue the stretch, using his wife’s remaining life expectancy?

Sincerely,

Thierry


Answer:

Hi Thierry,

Thanks for attending our 2-Day IRA Workshop for Financial Advisors!

Unfortunately, because the daughter died after 2019, the husband (a successor beneficiary) cannot “step into her shoes” and continue the stretch. Instead, he is subject to the new 10-year payout rule under the SECURE Act. He is not required to take annual RMDs and can take as much or as little as he wants each year. However, he must empty the entire inherited IRA by December 31, 2030.

 


Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to matt@irahelp.com for approval.

For white papers/other outflow pieces:
Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:
Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:
Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at matt@irahelp.com or (516) 536-8282 with any questions.

 

Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.
 

I agree to the terms and services:

You may review the terms and conditions here.