Inherited Roth IRA
Roth IRA owner dies last year (2024)
Surviving spouse primary beneficiary / son contingent beneficiary
Surviving spouse dies in 2025 before she did anything with the deceased spouse’s Roth account.
Questions
Who owns the account? Son as contingent beneficiary or whomever was the surviving spouse’s beneficiary?
What payout schedule applies? and to whom?
Thank you in advance
Permalink Submitted by Alan - IRA critic on Fri, 2025-02-07 13:13
The surviving spouse inherited the Roth and if they did not name their own beneficiary, the estate of the surviving spouse becomes the beneficiary and owns the account. The son was only the contingent beneficiary while the owner lived, although might still inherit based on the surviving spouse’s will pending probate.
RMDs in this scenario are tricky. Because the surviving spouse took no action and passed prior to the end of the year in which they would have been required to take a beneficiary RMD, they are treated as the Roth owner with respect to beneficiary RMDs to the estate. As such, the estate will be subject to the 5 year rule.
Perhaps the Roth custodian will cooperate with a request from the executor or SS’s estate to assign the inherited Roth out of the estate to the estate beneficiary(s), perhaps the son. The son would still be subject to the 5 year rule, but the estate could terminate and the son could manage his own inherited Roth IRA for 5 years.