Spouse 10 years younger as sole Beneficiary

Submitted by MIKE KRUCHTEN on Mon, 2023-10-16 12:50

Spouse who was sole owner and 15 years younger of her husband’s IRA elected to claim as a Bene IRA vs. her own. He was RMD age.

I believe her only RMD options is to continue his RMD schedule or use Jt Life table? If true, does Bene IRA still have to be closed via 10 year rule? I believe she could rollover to her own IRA at 10 year mark based on Secure Act but could Bene IRA stay open past 10 years should she not have reached age 59.5?

When calculating RMD using Jt Life table after first RMD (year 2), does the factor drop by 1 similar to Single life table calculation?



Submitted by Alan - IRA critic on Mon, 2023-10-16 14:47

  • The joint life table only applies to the IRA owner with a sole spouse beneficiary more than 10 years younger. This table also applies to the year of death RMD of the owner, which the surviving spouse must complete if the owner did not.
  • For years after the year of death, the joint life table no longer applies and the single life table based on the age of the surviving spouse applies. The annual 1.0 reduction does not apply to a sole spouse beneficiary, therefore the table divisor for the current age of the spouse in that year applies. 
  • There is no reason not to elect ownership once the surviving spouse reaches 59.5 since any early distribution penalty no longer applies. The new deadline for the surviving spouse to assume ownership in this case is the year that the surviving spouse would reach their own RMD age if that spouse has not yet reached that age. 
  • If the surviving spouse fails to take their annual beneficiary RMD in the meantime, they default to ownership status whether they requested it or not. In this case that would erase that year’s beneficiary RMD. This default rule ends when the option to assume ownership ends.
  • After the deadline the surviving spouse can still do the spousal rollover, but it  must be done by distribution and rollover of amounts in excess of the beneficiary RMD for that year rather than by assumption of ownership. This is a new provision in the IRS proposed Secure Act Regs.
  • Rather than tracking all these dates, the surviving spouse here should just make a note to elect ownership once they reach 59.5. That eliminates all RMDs until that spouse reaches RMD age for owners.

Submitted by MIKE KRUCHTEN on Tue, 2023-10-17 13:28

To clarify my case, surviving spouse was sole beneficiary of her husband’s IRA. He was 73 in year of death (2022) and taking RMD’s. Wife was 55 years old in 2022 and elected to assume the IRA as a beneficiary IRA in case she needed liquidity. Her husband had taken his 2022 RMD prior to his death.So my question is what RMD calculation is required for 2023??I was under the impression an RMD had to be removed due to RMD being started from original IRA owner but your response seems to state no RMD is required from spouse in 2023 and not until her RMD date in the future. 100% she will move the beneficiary IRA to her own upon reaching 59.5.The surviving spouse(Bene IRA owner) has no cash needs and would prefer not to to take distributions from the Bene IRA.Is their any scenario where a sole surviving spouse named 100% beneficiary is required  to take RMD’s from a Beneficiary IRA before surviving spouse turns RMD age? 

Submitted by Alan - IRA critic on Tue, 2023-10-17 15:36

  • The wife must take a beneficiary RMD for 2023 using the single life table and her attained age in 2023. These beneficiary RMDs would cease in the year the spouse elects to assume ownership, which should be done once she reaches 59.5. In that year the assumption of ownership will result in her being treated as the owner for that entire year and all future years. As the owner with a birth year after 1959 her RMD age will be 75.
  • In short, beneficiary RMDs starting in 2023 through the year prior to reaching 59.5. Then assumption of ownership after 59.5 in that same year will eliminate beneficiary RMDs in that year and until she reaches 75.
  • If she fails to take a beneficiary RMD this year or any future year, she defaults to ownership. While that would eliminate the beneficiary RMDs, if this happens before 59.5 she will owe a 10% penalty if she takes a distribution from the owned IRA. For this reason, the beneficiary RMDs should be taken until actually reaching 59.5. There is no way to avoid these RMDs unless she either defaults to ownership or elects to assume ownership, so she must decide in the meantime whether or not she will need any distributions prior to 59.5. How sure is she that something will not happen that causes her to take a distribution subject to penalty?  Does she have plenty of other funds for spending and emergency needs and higher taxes due to filing single?  
  • The 10 year rule does not apply here because the surviving spouse is an EDB.

Submitted by MIKE KRUCHTEN on Tue, 2023-10-17 19:11

Surviving spouse will use the single life table and her attained age in 2023 and will repeat until she reaches 59.5 by using newest factor based on her new age not drop factor by 1 each year? Whereas if it was not a spouse or EDB, same table but you would subtract by one?? 

Submitted by Alan - IRA critic on Tue, 2023-10-17 19:28

Correct. A non spouse subtracts 1.0 each year (or also a spouse who is NOT the sole beneficiary). A sole spousal beneficiary re enters the single life table each year to get the new divisor. This slightly reduces the RMD compared to that of a non spouse because it lengthens the LE of the spouse by having lived another year.

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