Postmortem Strategies to Shift REtirement Plan Assets to the Spouse

Submitted by Peggy Fisher on Fri, 2013-11-15 15:34

Question on the first page. Page 369, center column, last paragraph. Have I broken down the concept correctly?

Husband and wife, alive.
Husband dies.
Wife rolls over his IRA to her own IRA.
At 70 ½ wife takes distributions over the joint and survivor life expectancy of her and her oldest designated beneficiary.
After wife dies, her beneficiaries chosen by her can spread the remaining benefits over the life expectancy of the oldest designated beneficiary.



Submitted by Alan - IRA critic on Fri, 2013-11-15 16:40

  • No, these RMD rules changed with the IRS release of new RMD rules in 2001. Under current Regs, the after the wife rolls over the IRA as her own IRA, her RMDs are simply based on the Uniform Table III which automatically includes calculations based on a joint life expectancy of the wife and a beneficiary 10 years younger. This is why the Uniform Table always produces a lower RMD than the single life table for a person of the same age.  The only time the beneficiary would matter here for RMD purposes would be if the surviving spouse re married and new spouse was MORE THAN 10 years younger.
  • After the wife dies, since she owns the IRA, her designated beneficiary can use their own life expectancy for RMDs. Children or other non spouse beneficiaries use the Single Life Table I. If there are more than one beneficiary AND if separate inherited IRA accounts are not created by the end of the year following the year of death, RMDs for both beneficiaries must use the age of the oldest.
  • Generally, automatic use of the oldest beneficiary without option applies only to the beneficiaries of trusts named as the IRA beneficiary. This is true because the separate inherited IRA account rules do NOT apply to trusts.
  • While most of this article still applies, there may be a few situations such as this one that changed with the 2001 RMD Regs. The portion of p 369 you are referring to still applies in general as the first surviving spouse must make a choice as to WHEN it is best to rollover the IRA in her name. Here is a link to the referenced article: http://www.kkwc.com/docs/AR20050125164755.pdf


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