Spouse inherited 457 pre-SECURE Act
Wife currently age 75 inherited deceased husband’s 457 back in 2016. Husband’s age (if still alive) would be 69.
She left the funds in the plan at Nationwide as a 457 but transferred into her name.
If she leaves the account as a 457 (and somehow it is coded as a beneficiary/inherited account), will she not need to take RMDs until her deceased spouse would be RMD age (so 73 years old with a 1954 birth year)?
IF the account is in her name with ZERO affiliation to deceased (so she assumed completely as her own), then it is our understanding that since she is currently of RMD age that she would need to be taking them.
The client is getting mixed info from the custodian (custodian is saying the account is not inherited and is hers only, yet they are saying that RMDs are not required until the deceased RMD age – which does not make sense), so we are trying to get confirmation.
Many thanks!
Permalink Submitted by Alan - IRA critic on Mon, 2023-11-13 16:39
Yes, as the sole beneficiary her beneficiary RMDs do not start until the year husband would have reached age 73. The account must be titled in beneficiary form because the Secure Act provision allowing a sole surviving spouse beneficiary to elect to assume ownership is not effective until 2024. The plan’s indications are conflicting. Client should eventually decide whether she wants to assume ownership, which would trigger RMDs as the owner or do a direct rollover to her own IRA. If she wants to delay RMDs as long as possible she would remain as beneficiary until 2026, then assume ownership or do a direct rollover to her own IRA.