Beneficiary question
I have a prospective male client who is 71. In January his wife, age 57, passed away. He is the primary beneficiary of his IRA. I need guidance with one of the options he has, to leave the account in her name and defer taking a distribution until what would have been her RMD timetable in 14 yrs. My question is, if he does leave the account in her name can he, at anytime during the next 14 years change his mind and re-title the account to his name and begin taking a distribution? Or, does he have to wait the entire 14 years until what would have been his late wife’s RMD timeline? Thanks!
Permalink Submitted by mk foss on Mon, 2012-07-09 16:37
To take advantage of the deferral until his spouse would have been 70.5 he’d move the benefit to a beneficiary IRA account. Then he doesn’t have to take RMDs but he can take funds as needed.
There is no time limit on a spousal rollover – he can move some or all of the funds to his own IRA (or a new IRA) at anytime during his life time. Of course he’ll have to take RMDs based on those additional funds the year after they’re moved over.