Spouse has inherited IRA – are they subject to RMD?
Husband died 12 years ago, the broker at that time set up an inherited IRA with the wife as the beneficiary rather than rolling the IRA to the spouse’s IRA outright. Both were under age 50 at the time. Is the spouse exempt from having to take the RMD on the inherited IRA?
Permalink Submitted by Jose Morales on Thu, 2015-08-20 19:52
If the account is maintained in an inherited IRA, the spouse does not have to begin taking RMDs until such time as the deceased spouse would have had to begin RMDs. Now that the surviving spouse is over the age of 59 1/2 it may be best to move the funds into their own IRA, as they can take distributions with no penalty. If the deceased spouse was significantly younger than the surviving spouse and leaving the funds in an inherited IRA will result in holding off RMDs longer than if the funds are assumed by the surviving spouse, it may be better to leave them in the inherited IRA. Without knowing the exact ages of the person’s in question at the time the IRA owner passed it’s hard to say one way or another.
Permalink Submitted by Stephen Csenge on Thu, 2015-08-20 20:12
So they are exempt from the RMDs starting in the year following the date of death. Much thanks for the help!
Permalink Submitted by Alan - IRA critic on Thu, 2015-08-20 20:28
Yes, surviving spouse is not required to take an RMD until the year deceased spouse would have reached 70.5. Surviving spouse should maintain the IRA as inherited at least until 59.5 so distributions will be penalty free should the surviving spouse need to take distributions to meet expenses. The key then is to make sure the surviving spouse does not wait too long to roll the inherited IRA over to an owned IRA. Too long would be waiting beyond the year the decedent would reach 70.5.