Spousal Roth

Submitted by nick sklenar on Wed, 2014-04-16 23:13

Husband-63, Wife-57, husband died last month and left his Roth to the wife. Roth is about 10 years old. Correct me if I’m wrong:

1.She can roll it into a Roth in her name.
2.She will never have RMD’s.
3.Once it is transferred, it will be as if she was the original owner.

Thanks in advance.

Permalink Submitted by Alan - IRA critic on Thu, 2014-04-17 00:22

She can, but if she rolls it over, it will be treated as if it was hers all along, so will not be qualified until she reaches 59.5. There would be no RMDs if she rolls it over, and the ordering rules would apply to any distributions, i.e. regular contributions out first, conversions next, and earnings last. If she reached the earnings prior to 59.5, the earnings would be subject to tax and penalty.
No RMDs if she owns it, but if she maintains it as inherited, she will have to start RMDs once her husband would have reached 70.5. But in this case, her inherited Roth is qualified and the full account is therefore tax and penalty free.
This is correct if she rolls it over. Some Roth contracts may even make her the owner automatically.
The choice therefore is related to how much she will need from this Roth IRA before she reaches 59.5. If she needs enough to have to tap earnings, she might keep it inherited until she reaches 59.5, then roll it over to her name.