Any advantage to spouse having separate IRA?
My spouse is the sole beneficiary of my rollover IRA. I understand that when I die, she can treat it as the new owner or as beneficiary. Is there any advantage for her to maintain her own IRA prior to my death to which she can rollover part or all of mine?
Permalink Submitted by Alan Spross on Fri, 2007-09-21 23:55
No, other than just maintaining tax deferral on her own IRA.
There is no advantage adding your IRA to hers vrs. either assuming your IRA or maintaining it as an inherited IRA if she was under 59.5 at your death. This answer may be slightly different for Roth IRA accounts.
If she has a small TIRA and you have a large rollover IRA, there may be some asset protection benefit under state and federal law if she does NOT commingle it with her IRA. Under the federal BK law, rollover IRAs have unlimited protection, but IRAs containing regular contributions are limited to 1,000,000 plus inflation. This is all moot if you live in and she will always live in a state that fully protects IRA accounts. There are some like CA that do not.
So I see no reason not to draw her IRA down, if tax and other considerations lead to that conclusion.