Spousal Beneficiary Account rule under the SECURE Act

Submitted by Sharon Owens on Tue, 2020-05-26 20:36

The husband has passed away on March 15, 2020 and the wife, who is 44 years old is the sole beneficiary. In order to have access to the funds without penalty, a beneficiary IRA has been opened. Will the account have to be depleted in ten years or can she opt to take it as her own on the 10th year? Or can she leave it in the beneficiary account because she is the spouse?



Submitted by Alan - IRA critic on Tue, 2020-05-26 23:19

  • Just as prior to the Secure Act, she can maintain the account as an inherited IRA. There are no RMDs until the year the husband would have reached age 72 but any distributions she needs will be penalty free. At 59.5 she should elect to assume ownership of the inherited IRA, and her own RMDs will start at 72.
  • The Secure Act does not affect her because as a surviving spouse she is an eligible designated beneficiary (EDB). An EDB is exempt from the 10 year rule and can take life expectancy RMDs as before, but for a sole spousal beneficiary these RMDs do not start until the year husband would have reached 72.

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