Spouse inherits Roth ….

Submitted by David Demeuse on Thu, 2013-09-26 18:58

We have a client that passed away in 2010 age 67, spouse is currently 73 and is now assuming these funds as his own. With the timing of the transfer, are there any RMD issues?



Submitted by Alan - IRA critic on Thu, 2013-09-26 19:45

No. If the spouse remained as beneficiary, there were no RMDs due until the year the deceased spouse would have reached 70.5 which could well be this year. While there would have been an RMD due this year but not earlier, by assuming ownership or rolling it over to his own Roth IRA this year, he is treated as if he were the owner the entire year, and that results in the RMD for this year being erased.

Submitted by Peggy Fisher on Mon, 2013-09-30 15:25

Clarification on the last sentence please because I think if the 73 year old had assumed ownership this year of a traditional IRA there would have been a RMD due this year because the IRA would be treated as if he were the owner the entire year.  If the 73 year old rolled it over to his own ROTH IRA this year than it would have resulted in the RMD for this year being erased. Right?  This is a question not a statement.  🙂

Submitted by Alan - IRA critic on Mon, 2013-09-30 19:45

  • First, you are correct that if this had been a TIRA, the 73 year old surviving spouse doing a rollover would have an RMD due this year as a result of being treated as the owner the entire year. The RMD would only be erased if the surviving spouse would not reach 70.5 by the end of this year. And if the 73 year old surviving spouse wanted to convert to a Roth IRA, they would have to take out the 2013 RMD first and then convert any additional amount. You might wonder why the RMD is necessary if surviving spouse was treated as a Roth owner the entire year. The reason is that an inherited TIRA cannot be converted. To convert the surviving spouse must acquire ownership first and when this is done over age 69.5, the TIRA RMD is required for that year despite proceeding with an immediate conversion.
  • Of course, the original post involved an inherited ROTH IRA. An inherited Roth IRA is already a Roth and there is no conversion, just a rollover to an owned Roth. Surviving spouse is treated as owning the Roth the entire year instead of holding it as an inherited Roth, so there is no RMD due here.

Submitted by David Demeuse on Tue, 2013-10-29 18:30

I do have to apologize for not getting back to you a lot sooner….I should have clarified right from the start that the account the deceased held was a Roth IRA…nothing was done with the account since her death back in 2010 at the age of 67.  Husband who is 73 is now looking to do something with it.

Submitted by Alan - IRA critic on Tue, 2013-10-29 18:51

He should roll it over to his own Roth IRA now, and in fact some custodians include provisions in their Roth contract that a sole spousal beneficiary is automatically deemed the owner. If he rolls it over to his own Roth before year end, he will be considered to have owned the Roth all year and he will not have an RMD due as beneficiary. Further, there is no RMD due for 2012 or earlier as beneficiary since his spouse apparently had not reached 70.5 until this year.

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