RMD for deceased spouse

Submitted by Mike Leffler on Wed, 2017-03-22 18:20

If the IRA account holder is over age 70.5 and has therefore begun RMDs, but dies in during the year before taking his RMD, does his spouse, who is the sole beneficiary have to fulfill his RMD before the IRA is placed in an IRA under her own name? Thank you!



Submitted by Alan - IRA critic on Wed, 2017-03-22 18:41

No. The surviving spouse can assume ownership of the inherited IRA without a distribution that would be applied to the year of death RMD. But they still have to complete the year of death RMD from their own IRA in that case.  However, if the surviving spouse takes a distribution, they cannot roll over to their own IRA the amount of the year of death RMD or later year RMD if the first distribution is not done in the year of death.

Submitted by Mike Leffler on Wed, 2017-03-22 21:06

Thank you, however, I am still a little confused. Let’s say for example you have a husband who is 71 and a wife who is 65. The husband has therefore begun RMDs on his IRA. Let’s say after his first RMD he dies and leaves his IRA solely to his wife. However, the husband has not fulfilled the current year RMD. The wife wants to roll all assets into her existing IRA (which no RMDs have begun). In this case, does she still have to fulfill her husband’s curent year RMD before rolling all assets into her existing IRA?

Submitted by Alan - IRA critic on Wed, 2017-03-22 21:32

  • Again, she does but only if she takes a distribution and does not move the funds by direct transfer. If she takes a distribution, that will be applied to the year of death RMD, but if she just assumes ownership of the inherited IRA and then has it transferred in a non reportable transfer to an IRA she owns, there is no distribution and the year of death RMD has not been satisfied. In other words, taking a distribution is the key because an actual distribution is needed to complete the RMD for the year of death.
  • None of this is clearly spelled out in Pub 590 B. The concept of a spousal rollover is loosely applied to any action that results in the surviving spouse acquiring ownership of the inherited IRA. However, if ownership is acquired by assuming it or making a contribution to the IRA, or by failing to take a beneficiary distribution, there still has not been a distribution and the year of death RMD remains incomplete.
  • Rather than deal with these various possibilities, it is simpler for most surviving spouses to request the year of death RMD before rolling it over and get it out of the way. However, she does not HAVE TO take out that RMD and if the account is moved to her own IRA by direct transfer, that is OK but she would then have to complete the year of death RMD from her own IRA.
  • Rather than try to explain all this, many custodians just insist on the year of death RMD being taken out before any transfer, but it is not an IRS requirement.

Submitted by Mike Leffler on Wed, 2017-03-22 21:50

Thank you, that makes total sense. Appreciate your help!

Submitted by Jason Frank on Thu, 2017-03-23 15:10

Does it make any difference if a person dies the year that they turn 70 1/2?  I keep reading that the beneficiary must take the RMD if the original IRA owner dies AFTER their required beginning date.  What happens if, for example, a person dies in 2017, and they would have turned 70 1/2 later this year?

Submitted by Alan - IRA critic on Thu, 2017-03-23 16:18

The RBD applies here, not age 70.5. It is possible that the IRA owner could be 71 on DOD and still have passed prior to the RBD. To your question, whenever the owner passes prior to the RBD, there is no year of death RMD required.

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