Inherited Roth IRA for spouse beneficiary

Submitted by Sten Lindquist on Mon, 2014-07-21 17:51

Can anyone help with if the distributions rules for an inherited Roth IRA for a spouse beneficiary are the same as a traditional IRA? e.g. would distributions have to begin in the year the deceased owner would have turned 70.5? Also, if the spouse with the inherited Roth IRA dies post RBD, would the beneficiaries of the inherited Roth IRA only be able to take distributions based on the remaining life expectancy of the spouse with the inherited Roth IRA?

Thanks for any help with this.



Submitted by Alan - IRA critic on Mon, 2014-07-21 18:32

  1. The rules are the same as for a TIRA in many respects. If the sole surviving spouse does not assume ownership of the inherited Roth and if the Roth agreement does not automatically make the surviving spouse the owner, the surviving spouse will have the same RMD requirements as they would for a traditional IRA, ie. the RMDs would not start until the deceased spouse would have reached 70.5. If the surviving spouse fails to withdraw an RMD required as beneficiary, they also default to ownership of the Roth. One difference vs TIRA RMDs is that a Roth owner is always treated as passing prior to the RBD, but that would not affect a designated spouse beneficiary unless the 5 year rule was elected. Also see next point.
  2. If the spouse is treated as the beneficiary despite the above options and rules, and passes prior to the year deceased spouse would have reached 70.5, the beneficiary of the surviving spouse is still treated as a designated beneficiary and can use their own life expectancy for RMDs. However, if the survivng spouse continued to take beneficiary RMDs AFTER the year the deceased spouse would have reached 70.5, the beneficiary of the surviving spouse is then treated as a successor beneficiary and must complete the RMD schedule of the surviving spouse.
  3. One of the few reasons a surviving spouse would want to be treated as beneficiary of a Roth would be the need to complete the 5 year holding period to withdraw conversions under 5 years or earnings because the 10% penalty would be waived for death benefits. In most cases however, the surviving spouse should assume ownership of the Roth.

Submitted by Sten Lindquist on Tue, 2014-07-22 15:26

Thanks for your help

Submitted by Theodore Osinski on Tue, 2014-07-22 23:48

I believe spouse named as beneficiary is not required to take RMD. Both are over  70.5 and Roth conversion made more than 5 years ago.Can someone clarify.I checked with Fidelity and was advised if spouse named as beneficiary transfer would be made to Roth in her name and RMD not required

Submitted by Alan - IRA critic on Wed, 2014-07-23 02:55

True, no RMDs if the surviving spouse rolls it over to an owned Roth IRA. But the original post was about the RMD rules if the surviving spouse kept the Roth in inherited form. As stated, this is rarely beneficial. Age of surviving spouse was not stated.

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