RMD on Beneficiary IRA
I lost two younger clients in 2016. In both cases, due to the spouses ages, I set the accounts up as beneficiary IRAs for the spouses. All is good, or so I thought.
I just got a letter from one of the custodians showing clients needing RMDs for 2017, and one of the spouses is on it. In both cases, the spouse and the original client are under 59.5 and far under the 70.5, so I thought no RMD would be required, since the client died before RBD.
Am I wrong? do these spouse clients need to be taking RMDs now?
Permalink Submitted by Alan - IRA critic on Wed, 2017-11-01 16:06
The spousal beneficiaries can delay RMDs until the year the deceased spouse would have reached 70.5 ONLY if the spouse was the sole beneficiary of the IRA. Even if the surviving spouse was NOT the sole beneficiary of the IRA upon spouse’s death, but created a separate inherited IRA by the end of the year following the year of death, that surviving spouse is then treated as a sole beneficiary. Therefore, unless this person is NOT a sole spousal beneficiary it appears the custodian messed up and is treating this spouse as a non spouse beneficiary.