Deceased money purchase plan participant
Can the spouse beneficiary of a deceased money purchase plan participant treat the account as his own? The participant died after RBD and was already taking RMDs. Can the spouse just treat the account as his own and become the account owner and continue taking RMDs from this account? Or will the spouse need to rollover the funds to his own IRA or to an inherited IRA and start taking RMDs for this account?
Permalink Submitted by Alan - IRA critic on Wed, 2022-09-07 21:35
The surviving spouse for this plan cannot assume ownership. That can only be done with a direct rollover to an owned IRA, or if the surviving spouse is under 59.5 they could do a direct rollover to an inherited IRA and take penalty free distributions if needed. The year of death RMD (if not yet completed) must be distributed prior to any rollover to an IRA. Unless the surviving spouse is many years older than the decedent, owning the IRA will result in much lower annual RMDs.