Timing of Inherited IRA from a Spouse

Submitted by Jack Abriola on Thu, 2016-09-22 21:52

I have a client whose husband died more than a year ago and she is the beneficiary of his IRA. He is not at RMD age and she wants to roll his IRA into hers. Is there any time limit before the spousal beneficiary loses her ability to roll over the IRA into her own. I am concerned that it has been more than 1 year since death and she may have lost her ability to roll? Thanks



Submitted by David Mertz on Thu, 2016-09-22 22:44

  • In what year did the husband die?
  • Had the husband lived, in what year would he reach age 70½?
  • Has the surviving spouse taken any RMDs as beneficiary?


Submitted by Jack Abriola on Sat, 2016-09-24 20:56

1.  The husband died in May of 20152.  The husband was only 60, so no RMD issue3.  No RMD distributions to the beneficiary wife Thank you for your help. 



Submitted by Alan - IRA critic on Fri, 2016-09-23 02:31

There is no time limit for the client to roll over the inherited IRA. The question is when she should do it and that decision depends on age driven and other variables. In addition to the questions from DMx, what is the current age of the client?



Submitted by Jack Abriola on Sat, 2016-09-24 20:58

The current age of the client is 55 and the husband was 60, so no RMD issues.  My plan was just to roll his IRA over to hers, rather than do a benefiary IRA since she is younger and does not need the money at this time.  Since there is no time limit to do this, I believe this is the right thing to do, unless you believe I have missed an issue.Thanks for your help.



Submitted by Alan - IRA critic on Sat, 2016-09-24 21:26

If she rolls it over and needs distributions prior to 59.5, she will incur a 10% penalty, or have to set up a rigid 72t (SEPP) plan and take out an exact amount for 5 years. Therefore, it is safer to postpone the rollover till she reaches 59.5. She does not have to take RMDs as a beneficiary until husband would have reached 70.5, another 9 years. She should still name her successor beneficiary right away. But she also should make sure to remember to do the rollover right after reaching 59.5.



Submitted by Jack Abriola on Wed, 2016-09-28 01:03

Thank you. I appreciate your help



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