Inherited Roth IRA by spouse
Client passed away in 2020. He had a Roth IRA (over 5 years old). Spouse is primary beneficiary and over 59 1/2. This Roth IRA was funded though an annuity. The spouse choice was to “Continue Contract” and the spouse became new owner and annuitant. Will the spouse need to take RMD’s on this contract? Thank you,
Permalink Submitted by Alan - IRA critic on Tue, 2021-03-16 18:14
Be sure the spouse is titled as the Roth annuity owner, not a beneficiary. If so, the Roth is not subject to RMDs and is also qualified and tax free. She can use HIS 5 year holding period and HER age as a basis for qualification after doing the spousal rollover.