Joint Life Table Question

Submitted by Ryan Cole on Tue, 2016-11-15 19:53

Individual is 80 y/o and wife is 30 years younger.

Upon his passing, he wants his wife to inherit 80% of his IRA, and the remainder to this two children.
If there is one IRA account with primary beneficiaries split 80/10/10, he can’t use Joint Life table for RMD purposes.

What should he do? Open two IRA accounts, have spouse be sole beneficiary on one account, and have a second IRA where children are split beneficiary? So he’d just use Joint Life for one IRA, and Uniform table for other IRA?

Other suggestions?



Submitted by Alan - IRA critic on Tue, 2016-11-15 21:00

  • Yes, that would work since his RMD would remain much lower on 80% of his balance, and only increase on the IRA left to the children. If he wanted the balances to decrease uniformly, he would have to figure his RMD separately for both IRA accounts, then take 80% of the total from his wife’s IRA and the rest from the children’s IRA. Otherwise, the children’s IRA would decrease faster.
  • When partitioning the IRA into two accounts, do the transfer first then change the beneficiary to the children on the new account after it has been established. DO NOT add the children before doing the transfer.

Submitted by Ben Meyer on Wed, 2016-11-16 06:49

What is the reasoning for not designating the children as beneficiaries on the new IRA account before making the transfer?

Submitted by Alan - IRA critic on Wed, 2016-11-16 16:46

Per Q 4 in Reg 1.401(a)(9) -5 below note that if the spouse is not the sole beneficiary the entire year, they are not treated as the sole beneficiary for that year. So even one day with the children named, the RMD for that year goes up:

(b) Spouse is sole beneficiary -(1) General rule. Except as otherwise provided in paragraph (b)(2) of this A-4, if the sole designated beneficiary of an employee is the employee’s surviving spouse, for required minimum distributions during the employee’s lifetime, the applicable distribution period is the longer of the distribution period determined in accordance with paragraph (a) of this A-4 or the joint life expectancy of the employee and spouse using the employee’s and spouse’s attained ages as of the employee’s and the spouse’s birthdays in the distribution calendar year. The spouse is sole designated beneficiary for purposes of determining the applicable distribution period for a distribution calendar year during the employee’s lifetime only if the spouse is the sole beneficiary of the employee’s entire interest at all times during the distribution calendar year.

Submitted by Timothy Wolfe on Fri, 2018-06-01 19:01

Does this mean you cannot have any contingent beneficiaries?

Submitted by Alan - IRA critic on Fri, 2018-06-01 19:26

Contingent beneficiaries are not considered designated beneficiaries and therefore will not affect use of the joint life table. 

Submitted by David Mertz on Fri, 2018-06-01 21:34

I think Alan is assuming that the original IRA presently lists only the spouse as primary beneficiary and is indicating not to add the children as primary beneficiaries on the original IRA.  If the children are already included as primary beneficiaries on the original account, the current-year RMD from the original account would be based on the Uniform Lifetime table.

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