Spouse beneficiary IRA to Spousal IRA

Submitted by Tracy Duncan on Mon, 2017-09-11 13:34

Hello, I am new to this Forum so I apologize in advance if this question has been posted before and answered.

I have a client who established a beneficiary IRA from her deceased husband in 2008. She was under age 59 1/2 at the time and he had not yet reached is RBD.
She is now age 61.
Can she rollover over the beneficiary IRA into a new IRA only in her name (spousal IRA)?



Submitted by Alan - IRA critic on Mon, 2017-09-11 17:33

  • Yes, and probably should do so. The only reason she might not do so would be if she is considerably older than her husband and would not want to take RMDs at 70.5 (9 years from now) and could avoid them by maintaining a beneficiary IRA until husband would have been 70.5. 
  • In addition, the year IN WHICH she rolls the inherited IRA over to her own IRA, she is treated as owning it the entire year. Therefore, if husband would have been 70.5 this year, if she rolls it over this year she will have no RMD. Further, if she did nothing this year and failed to take out the beneficiary RMD, she becomes the owner by default which also eliminates the beneficiary RMD. 
  • But in most cases, at 61 she should roll it over and be sure her own beneficiaries are correct.

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