Permalink Submitted by Alan Spross on Mon, 2010-03-22 21:50
Most of these plans now allow a non spouse beneficiary to stretch RMDs over their life time, but it is not a requirement. For those plans that require the 5 year rule for death prior to the RBD, the non spouse beneficiary can now insist on a transfer to an inherited IRA account and the plan must comply beginning this year. However, the transfer must be done prior to the end of the year following plan owner’s death for the IRA stretch provisions to apply. A non spouse beneficiary also has the option to transfer to funds to an inherited ROTH IRA, but of course that would amount to a taxable conversion.
Permalink Submitted by Alan Spross on Mon, 2010-03-22 21:50
Most of these plans now allow a non spouse beneficiary to stretch RMDs over their life time, but it is not a requirement. For those plans that require the 5 year rule for death prior to the RBD, the non spouse beneficiary can now insist on a transfer to an inherited IRA account and the plan must comply beginning this year. However, the transfer must be done prior to the end of the year following plan owner’s death for the IRA stretch provisions to apply. A non spouse beneficiary also has the option to transfer to funds to an inherited ROTH IRA, but of course that would amount to a taxable conversion.