Inherited IRA
The wife inherited her husband’s IRA he was 60 when he died this year and she is now 55. Is it correct that if she keeps the IRA as an inherited IRA then she can take distributions without the early withdrawal penalty? And she will have to take MRD from the account starting in the year after the year of death (2011)? What should the proper title of the account be?
Note she does not have children and her beneficiaries are older than her.
Thanks for your help.
Permalink Submitted by Alan Spross on Tue, 2010-11-02 19:04
Yes, if there is any chance she needs distributions prior to 59.5, she should retain inherited status for the IRA until she reaches 59.5. She can take distributions as she needs them without any early withdrawal penalty, and there would be no RMDs until the end of the year her husband would have reached 70.5. But she should assume ownership of the IRA after reaching 59.5, which is prior to the year she would need to begin RMDs.
The IRA custodian probably has preferences for the title format on the inherited IRA, but it must include the decedent’s name and her own, eg ” Ann Smith as beneficiary of Gerald Smith”.