Joint life expectancy table

Submitted by Robert Roselli on Thu, 2020-01-23 16:38

I handle all the RMDs for our firm, and I’ve been here less than 1 year. I have a few questions.

I know the spouse has to be more than 10 years older and be the sole beneficiary.

1) What if the spouse is 100% Primary beneficiary, and the children are all Contingent beneficiary. can the IRA holder use the Joint life table? Does the spouse have to be the only beneficiary or only Primary beneficiary?

2) Is the 10 year rule to the day? If i am 5/19/1949, and my spouse is 05/20/1959, does that qualify?

Thanks



Submitted by Alan - IRA critic on Thu, 2020-01-23 17:28

  1. The sole beneficiary spouse must be more than 10 years YOUNGER for the owner spouse to use the joint life table because the Uniform Table assumes a beneficiary being exactly 10 years younger. Contingent beneficiaries do not affect the application of tables for the owner.
  2.  The 10 year difference is measured by the ages of the spouses at the end of the year. For your example the difference is 10 years, so the Uniform Table applies. It produces the same divisor as the joint life table for sole spouse beneficiary exactly 10 years younger. Therefore the beneficiary spouse must be 11 or more years younger as determined at the end of any year for the joint life table to produce a lower RMD.

Submitted by Robert Roselli on Thu, 2020-01-23 17:43

I have a client that was born in October 1937, and his spouse was born April 1948. At the end of 2020, Client A is 83, and his spouse is 72. If he uses the Uniform table, his factor is 16.3, if he uses the joint life, his factor will be 16.9.However, if his spouse will be 73, then the factor would be exactly the same at 16.3. So I can use the Joint Life correct?

Submitted by Alan - IRA critic on Thu, 2020-01-23 18:01

  • Yes, since the age difference is 11 years, the joint life table applies and generates a lower RMD than the Uniform Table. The higher divisor generates a lower dollar RMD.
  • The fact that his spouse will turn 73 while he is still 83 does not matter. Pub 590 B states that the age used is the age as of your birthday each year. That’s the same as your age at the end of the year. On his birthday in the year spouse reaches 73, he will be 84. 

Submitted by Robert Roselli on Thu, 2020-01-23 18:03

What happens if Client A is 11 years older than Client B, who is his spouse this year. In 2021, they get divorced, and Client b is still his sole beneficiary. Can he still use the joint life now that they are divorced?

Submitted by Alan - IRA critic on Thu, 2020-01-23 23:23

  • If they divorce in 2021 but Client B continues as the sole beneficiary through the end of 2021, the joint life table still applies for the 2021 RMD, but not after 2021.
  • Also, if either client  dies in 2021, the joint life table still applies in 2021

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