Spouse Beneficiary Options
“Ted” passed away in 2010 at age 65 and left his wife “Mary” (also age 65) as primary beneficiary of his Traditional IRA. Mary elected to remain as a beneficiary of Ted’s IRA and now would like to roll this IRA to her own IRA. I believe she has the ability to roll this IRA to her own IRA at any time. Is this correct? If so, where can I find this in IRS regulations? Thanks for your help.
Permalink Submitted by Alan - IRA critic on Fri, 2013-01-25 17:32
See p 16 of Pub 590 attached: http://www.irs.gov/pub/irs-pdf/p590.pdfNote that there is no deadline for doing this rollover. Based on both their ages, there is no benefit to continuing the inherited IRA, so the rollover should be completed. There are consequences from continuing the inherited IRA once she reaches 70.5 in the way of higher RMDs and restricted beneficiary RMDs, therefore the rollover should be done before it is overlooked.
Permalink Submitted by [email protected] on Fri, 2013-01-25 18:30
Great….thank you for confirming what I suspected and I agree that there is no benefit in her situation to remaining as a beneficiary on this IRA.