Spouse inherits IRA
Hello-
Wife inherits IRA from now deceased spouse. She can as one of the options, treat the account “as her own”. In order to accomplish this, must the account actually be rolled over into an account in her name?
I know the account can be titled to decedent as inherited with FBO spouse.
I know the account can be titled to spouse.
What if nothing happens to the account ( RMDs because the spouse is not yet 70 1/2)
Here’s a question that is probably not as complicated as I might make it out to be… 😀
Thank you everyone
Jim M
Permalink Submitted by Alan Spross on Fri, 2010-12-10 18:47
Jim,
If no action is taken at all, the account is considered inherited, not owned. However, if an RMD required of the beneficiary is not taken, then the account by default is considered to have been assumed by the surviving spouse as owner. A sole surviving spouse does not need to start RMDs until the year the deceased spouse would have reached 70.5, so in some cases, the account could set there for years as an inherited IRA. Of course, if the survivor does not name their own beneficiaries, unintended consequences can occur.
The surviving spouse who wants to assume ownership can roll the account over to a new or existing IRA owned by the survivor or have the account re titled in the survivor’s name. Most custodians however will want to set up a new account number once they know the survivor has assumed ownership.