Decedent RMD March 2020

Submitted by Aaron Tanner on Fri, 2020-05-08 16:57

I have a client that passed away in January, 2020. The custodian holding his IRA automatically distributed the decedent’s 2020 RMD in March, 2020 upon receiving the request to roll his IRA account to his Spouse as 100% beneficiary. Does the CARES Act allow for the decedent’s RMD (paid March, 2020) to be rolled into the Spouse’s IRA?



Submitted by Alan - IRA critic on Fri, 2020-05-08 18:25

  • Yes, since the distribution was not an RMD and the custodian should have known that by then. The surviving spouse has until 7/15 to complete the rollover since the 60 day deadline has been extended by the IRS. That said, the one rollover limitation could become an issue.
  • If the distribution in March was done on the same day as the spousal rollover, it would not result in a second disallowed rollover under the one rollover per 12 month limitation. If it was distributed on a different day, then it depends on how the spousal rollover was done (Distribution vs direct transfer).

Submitted by David Mertz on Fri, 2020-05-08 20:28

  • After the death of the decedent, any distribution should have been paid to the surviving spouse as beneficiary.  If it was mistakenly paid to the decedent, it needs to be treated as paid to the surviving spouse as beneficiary.
  • Since the distribution was received in March, 2020, the ability of the surviving spouse to roll this distribution over to the spouse’s own IRA does not depend on the CARES Act since the rollover deadline for this distribution is now 7/15/2020.  Such a rollover would still be subject to the one-rollover-per-12-months limitation.
  • The CARES Act would only come into play if this distribution could be treated as a Coronavirus-Related Distribution (CRD), allowing up to 3 years to complete the rollover and allowing the distribution to be disregarded with respect to the one-per-12-months rollover limitation.

Submitted by John J. Ernst on Thu, 2020-05-14 13:28

Does the Cares Act suspend RMDs for beneficiaries in 2020 if they inherited the IRA and were taking RMDs prior to 2020?  

Submitted by David Mertz on Thu, 2020-05-14 14:14

Yes, the CARES Act suspends all RMDs for 2020, including beneficiary RMDs.

Submitted by DIANE DAVIS on Thu, 2020-05-14 15:00

my cleint died in april of 2020  his daughters are beneficiaries and his estate is ove a million  when is the rmd due for him?

Submitted by Alan - IRA critic on Thu, 2020-05-14 16:08

Since all 2020 RMDs are waived, there is no year of death RMD to be completed for 2020. The daughters will be subject to the Secure Act 10 year rule (unless they qualify as eligible designated beneficiaries), so they will not be subject to annual beneficiary RMDs, but their inherited IRAs must be drained by 12/31/2030. Estate size is immaterial, but IF the estate was the actual IRA beneficiary and the daughters are only the beneficiaries of the estate and not directly named on the IRA, please advise including the age of client at death.

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