Inherited IRA question (spousal)
My client passed away in February 2008 at age 78. His 72 year old wife is sole bene. He had not yet taken his 2008 RMD. She does not have an IRA, but wishes to establish a new IRA for this money with her children as beneficiaries. Must we take his 2008 RMD before we do anything else?
Permalink Submitted by Al Fry on Sun, 2008-04-13 01:13
If one takes IRS Pub 590 (p.36) literally, she can assume ownership then take the RMD for 2008. They also word it in a way thay seems to give her a choice of using his age or hers (more favorable). Hovever I’ll defer to the other experts for the final word.
Permalink Submitted by Alan Spross on Sun, 2008-04-13 03:37
She may as well assume ownership of the account right away, as the RMD requirement for 2008 will be her deceased husband’s RMD amount whether she assumes ownership or whether she maintains it in beneficiary form. There are advantages to assuming ownership, such as lower RMDs for the children in the event of her death and lower RMDs for herself starting in 2009.
As for the mechanics, she must submit a death cert. and change the registration before taking the RMD so it can be properly paid to her, and the change should be assumption of ownership rather than just registering in beneficiary form.