Beneficiary IRA
Husband age 70; wife age 49. Husband has died. IRA is in an annuity at the annuity company. Wife wants to take withdrawals for living expenses from money. Can the annuity company cut a check made payable to the (brokerage firm) IRA custodian for the benefit of the wife under the deceased husbands name?
Permalink Submitted by Alan Spross on Fri, 2009-08-21 17:33
Yes, this would be a direct transfer to a beneficiary IRA and will allow the 49 year old surviving spouse to take distributions without penalty; she can then roll it over to her own name when she reaches 59.5. Meanwhile, she will have to take RMDs as a beneficiary, although 2009 RMDs have been waived. While she needs living expenses, starting next year she needs to be sure that she takes out no less than the RMD.
When she reaches 59.5, she can roll it over to her own IRA and RMDs will cease until she reaches her required beginning date after turning 70.5.