husband inherits wife’s IRA…
We have a client where his wife died at the age of 88, she has not taken her RMD for 2013. I want to confirm that the husband can transfer her IRA directly into his IRA and then distribute her 2013 RMD along with his 2013 RMD (he has not taken his for 2013). I don’t believe we need a separate IRA???
Permalink Submitted by Alan - IRA critic on Wed, 2013-10-16 20:51
You are correct. It would be clearer to take her RMD before the rollover, but it is not a requirement. If he takes both RMDs from his own IRA. the IRS might not realize that some of the distribution was not his own, but once explained it would be OK.
Permalink Submitted by David Demeuse on Thu, 2013-10-17 14:02
It is my understanding that we CAN NOT withdraw funds from an account once the client has passed away. We do have a systematic distribution setup on the account to run November 10th of each year in which we would cancel once we hear that the client has passed. Are you saying that we do have the ability to process the RMD prior to the account being transferred to the husbands IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2013-10-18 01:59
Yes, a distribution can be made directly to the IRA beneficiary, but most IRA Custodians will first require a beneficiary IRA be set up since the distribution will be reported under the beneficiary’s SSN on the 1099R. A spousal beneficiary could maintain the IRA in inherited status indefinitely, but when both the deceased spouse and the surviving spouse are over 70.5 the surviving spouse should always roll the IRA over to their own name and SSN.
Permalink Submitted by Peggy Fisher on Fri, 2013-10-18 16:45
Might want to mention here that year-of-death calculated for RMD’s will be calculated using the Traditional IRA owner’s age on his or her birthday in the year of death and his or her corresponding Uniform Lifetime Table factor. Not sure if it was clear there are two different calculalations. (i am assumeing the IRA owner’s spouse is not more than ten years younger).And I would agree with the earlier comment. Much cleaner to take RMD’s prior to tranferring the account. And although a spouse can do a ROLLOVER I would recommend you do a transfer. Just cleaner and less chance of something going wrong.
Permalink Submitted by Gloria Rice on Thu, 2013-10-24 05:47
If she has made will then it can be done easily or else it nedd some specific proceddings to do that.Read on this page