Spousal inheritance of an IRA
If a younger than 59 1/2 aged client’s spouse dies and due to age she elects to keep as an inherited IRA versus taking the IRA into her own IRA, can she later after age 59 1/2 change from an “inherited IRA” to IRA in her own name since a 10% pre-mature penalty would be applicable and no need to keep seperate?
Permalink Submitted by Alan - IRA critic on Thu, 2020-01-09 00:40
A surviving spouse can do the spousal rollover anytime. There is no deadline. Typically, if younger than 59.5 the surviving spouse will retain the inherited IRA to get penalty free distributions, then roll it over at 59.5. A sole surviving spouse does not have to start beneficiary RMDs until the deceased spouse would have been 70.5. However, once the rollover is done, there is no possibility of returning to inherited status.