Spousal IRAs vs FBO in Name of Deceased IRAs
Facts : There is no MRDs from Traditional IRAs required in 2009, the Deceased-was Older then 701/2 died in 2009- and the Surviving Spouse is Older then 701/2. The Surviving Spouse is the only Named Beneficiary in the Designated of Beneficiary Forms [100% Beneficiary] of the Deceased IRAs and then the Children in equal shares,etc.. Any new Designation of Beneficiary Forms[“DOBs”] of the Surviving Spouse will name the Children[ under the Ages of 59 1/2 ] to share equally in any/all IRA Distributions[The Children as Named Beneficiaries can use Non Spousal Rollovers upon Death,Right?]
Questions:
1. Is there a difference in “Life Expectancies” when taxable distributions are made to the Surviving Spouse- using a Spousal Rollover in an IRA in the the Name of the Surviving Spouse or/and a FBO of the Surviving Spouse of the Deceased IRA?
2. Will the surviving Children named-in equal shares- in any new DOB Forms under either Spousal Rollover IRAs and/or FBO of Surviving Spouse IRAs- be able to make Non Spousal Rollovers to their own IRAs ?; and
3. If the Surviving Spouse “Disclaims” part/entire interest in the IRAs-will the surviving Children be able to make Non Spousal Rollovers to their IRAs?
Thank You
Permalink Submitted by Alan Spross on Tue, 2009-09-15 03:13
1) Yes, the owned IRA produces lower RMDs. There is no benefit to considering retaining inherited IRA status at these ages. In fact, there is the added disadvantage that the childen would not get their own stretch if they inherited as successor beneficiaries of the surviving spouse’s beneficiary IRA.
2) No. Only a spousal beneficiary can do the rollover to an owned IRA.
3) Still no. But if the childen are named as contingent beneficiaries (not clear if that was the case), they can take RMDs over their own life expectancies. They can also do that if the surviving spouse names them as designated beneficiaries, but then they must wait until surviving spouse passes.