The surviving spouse can do neither.

This non spouse inherited IRA cannot become assumed or owned by her husband and is not marital property even in community property states. Therefore her husband will never have the authority to change the beneficiary on this IRA. It would take an act of forgery after his wife’s death, but IRA custodians are very careful about making beneficiary changes. All she has do is be sure that she names her kids as successor beneficiaries on the inherited IRA and it will go to them after her death. However, her kids will NOT get a new stretch, but will have to continue their mother’s RMD schedule.

If grandma named the g kids as contingent beneficiaries, the child could file a qualified disclaimer and the inherited IRA would go directly to the g kids and they would also benefit by being able to use their own life expectancies for RMDs, if they created separate accounts by the deadline. Again, the child’s husband would have no authority to do anything about this either.

Now if the child wanted name her husband as her successor beneficiary with the understanding that he name the g kids as his successor beneficiary, she would not have a way to prevent that from happening or a way to prevent him from draining the account unless she created a trust to receive the IRA and control the distributions from that IRA to limit the amounts distributed to her husband so that there would be funds remaining for the g kids as remainder trust beneficiaries. But this seems like overkill unless this inherited IRA is large enough to warrant these extra expenses.

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