Deceased Son Names Father age 76Beneficiary of Inherited IRA
I would like to know what happens if the father dies this year having named his 77 year old spouse as primary beneficiary and before receiving this year’s rmd (12/31/06 acct value divided by dad’s 12.7 year life expectancy. Is the prior year 12/31 account balance divided by 12.1 the surviving spouse’s life expectancy?
Permalink Submitted by Alan Spross on Thu, 2007-09-27 04:00
For the father’s divisor to be 12.7 in 2007, the son must have passed in 2006. Father then named his spouse as his successor beneficiary and passed without taking any of his 2007 RMD.
His surviving spouse cannot make this IRA her own or roll it over since it was an inherited IRA of her husband and not his own. It remains a non spouse inherited IRA as it was when her husband inherited it. She must continue the same RMD schedule based on his non recalculated life expectancy. Therefore, the 12.7 divisor remains applicable for her for 2007, then becomes 11.7 in 2008 etc.
Failure to take this RMD by 12/31 will likely trigger the 5 year rule because the son obviously passed prior to his RBD.
Pub 590 does not adequately clarify successor beneficiary issues.