How to calculate RMD when primary beneficiary is a foundation and spouse?
A client turned 70.5 this year and wants his primary beneficiary divided–> 40% his non-operating foundation and 60% his spouse who is more than 10 years younger than him. Does this affect his RMD calculation? If so, how should it be calculated?
Permalink Submitted by Alan - IRA critic on Thu, 2016-08-18 01:58
Yes, it does affect his RMD. As is, his RMD will be based on the typical Uniform Table. Had his spouse been the SOLE beneficiary of this IRA, his RMD would be lower because he would then use the Joint Life Table II which factors in both his age and the age of his spouse to determine the RMD. The younger the spouse is in addition to the 10 year difference, the lower the RMD. He could partition the IRAs into two accounts and next year his RMD for the 60% spousal beneficiary account would be lower, and the 40% balance in the other IRA would have the same RMD calculation as his IRA does currently has. He could aggregate those RMDs, in other words add up the RMD for each account and then distribute that RMD in any combination from the two accounts.