Beneficiary Rollover from Qualified Pension Plan to Spouse

Hello. While I am familiar with the proper titling of a beneficiary IRA for a surviving spouse, can someone provide insight as to how the transfer from a Qualified Pension Plan should be handled for a surviving spouse as the named beneficiary?

Thank you



The inherited IRA would be titled in the same manner that the custodian prefers for any inherited IRA. Typically, that would be “(surviving spouse” as beneficiary of (decedent)”.  I suggest using a large professional IRA custodian and have them request the direct rollover from the plan. The custodian should understand that the intent is not to do the spousal rollover to an owned IRA, but to maintain the IRA as an inherited IRA until such time that the spouse determines is appropriate to elect ownership of the inherited IRA. 

Why would she not just elect ownership to her own IRA from the start?

In most cases the spousal beneficiary does roll the plan over to their own IRA. However, if the beneficiary is not yet 59.5 and needs distributions they will owe the 10% penalty for pre age 59.5 distributions and to avoid this penalty the IRA should remain inherited until 59.5.  There are other instances when the beneficiary spouse is much older and the deceased spouse passes prior to age 72, the surviving spouse can avoid RMDs by maintaining the IRA (or the plan if annuity payments have not begun) as inherited until the deceased spouse would have reached 72, and then assume ownership when beneficiary RMDs must begin. 

Thank you for the prompt response, in her case she will not need the assets and was younger than her husband.  Thanks for the clarification.

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