Beneficiary IRA
A client’s husband died in 2014. Based upon the recommendation of the insurance company, she rolled his IRA into a Beneficiary IRA for her. The insurance company is now mandating she take RMDs from the account. I was under the impression that because she was his spouse, even if she rolled it over to a Beneficiary IRA, no RMDs were required. However, since she is 46, she could access the money without penalty prior to 59 1/2 if needed versus rolling it over into her own IRA. The insurance company has sent her a 5498 and when she inquired was told she must take the RMD by year end. Can some one help me understand the rule and what is correct? Thank you in advance for your assistance.
Permalink Submitted by Alan - IRA critic on Fri, 2015-09-18 23:27
As long as she is the sole beneficiary on the IRA, you are likely correct and her RMDs do not begin until the year her husband would have reached 70.5. But you did not say how old he would have been at year end 2015, and only if he was that much older than she is would the insurance company be correct. If the missing facts point to no RMD, elevate the discussion to someone else at the insurance company. They cannot force out an RMD, but if the 5498 is incorrect they need to revise it. Their records will show decedent’s age.