New Post-Death Option for Surviving Spouse

Submitted by Brian Devers on Mon, 2023-01-09 14:35

I have a particular client to whom I am hoping the Secure Act 2.0 will be beneficial.

In 2022, his spouse, 3 years younger, passed away. My client turns 72 in 2023, so Secure 2.0 has moved his RMD out to 2024 when he turns 73.

With the newly added provision for surviving spouse, I believe he will qualify for deferring his RMD until 2027 when his spouse would have reached RMD age. If he turns 73 in 2024 and the ability to elect the deceased spouse’s RMD age goes into effect in 2024, will he qualify to make that election?

Section 327 of the Secure 2.0 is only 2 sentences long. When and where will I be able to get more information on this provision?

Thanks,



Submitted by Alan - IRA critic on Mon, 2023-01-09 16:39

  • Under current regs, client can defer beneficiary RMDs until 2027. By then Sec 327 should be supported by IRS Regs. As is, there are some questions about it.
  • Sec 327 intends to eliminate an advantage of a QRP spousal rollover to an IRA by providing use of the Uniform Table in the plan. More surviving spouses will then keep the assets in the plan. But in addition to the Uniform Table the surviving spouse can use the age of the deceased spouse, if younger.  Up to 2024, the Uniform Table could be used only with the age of the plan owner, not the age of the deceased spouse.
  • Qualified plans (except 403b) do not have RMD aggregation options like IRAs. Surviving spouses often have IRAs of their own. The inherited IRA or inherited QRP for which the surviving spouse is treated as the owner could not be combined with IRAs already owned by the spouse since the RMD divisors would differ. The IRS would have to determine how and if IRA RMD aggregation rules would be affected by differing age based Uniform Table divisors for IRAs. Up to now spousal beneficiaries typically do the spousal rollover and  combine the IRAs into one account to simplify things.

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