Death of 70 3/4 yr old professor with TIAA-CREF qual and NQ accts to Surviving Spouse
I was asked to assist a recent 68 y.o. widow whose 70 3/4 yr old professor husband died Nov 30, 2015. He has both qualified and NQ aftertax accounts with TIAA-CREF. He was on sick leave with the university and was therefore still employed. He had never made any distributions from his Qualified or NQ accounts. My understanding is that the NQ accounts do not have any RMDs, and that there are no RMDs required based on the deceased spouse since he did not retire, but rather passed away. The widow should be able to make a 100% rollover IRA to her name and base any RMDs on her younger age.
However, the TIAA CREF rep has told the widow that the NQ accounts have RMDs, and that also she must take out an RMD based on husband’s past 70 1/2 yo age by Dec. 31, 2016. I believe the TIAA-CREF rep is incorrect. Any feedback is helpful.
Permalink Submitted by Alan - IRA critic on Fri, 2016-03-11 20:03
The NQ account distributions do not follow the RMD rules of Sec 401(a)(9), but rather the individual contract as modified by state law. As for the qualified accounts, the husband passed PRIOR TO his RBD, so you are correct that there is no 2015 RMD due. However, 2016 is an RMD distribution year for his widow with the distribution due by year end, but an IRA rollover earlier cannot include the 2016 beneficiary RMD. Had she rolled this over prior to the end of 2015, a 2016 RMD would have been avoided. IRS Reg 1.401(a)(9)-5 Q 5. Further, an eligible rollover distribution does not include any amount that is the beneficiary’s RMD.