Spousal Inherited IRA
I have a client who passed away DOB 8-10-43 and left his wife as beneficiary of his 403B, her DOB is 1-7-44. She will have to begin taking RMD if we move into her IRA but If we do a spousal Inherited IRA won’t she have to begin income payments on that as well. Should we open an IRA in her name or a spousal IRA? Why/Why not? Thanks
Permalink Submitted by Alan - IRA critic on Mon, 2014-07-28 17:14
The surviving spouse will have RMD requirements for 2015 whether she retains the inherited 403b, transfers to an inherited IRA, or rolls to her own IRA, but the RMD will be lower if she rolls it to her own IRA because she can use the Uniform Table instead of the single life table that applies to inherited plans. She must also complete the 2014 403b RMD if client did not complete it before passing. And if she were to maintain either the 403b or an IRA in inherited status, her own beneficiary could not use their own life expectancy were the surviving spouse to pass.