Inheriting an IRA from Spouse

Submitted by Renee Grey on Mon, 2023-06-26 15:36

Surviving spouse was named beneficiary of an IRA. At the time of death in 2018, the surviving spouse was 57 years old and the decedent was 63 years old. Surviving spouse elected to transfer assets to an inherited IRA to avoid early withdrawal penalty. Fast forward to 2023, surviving spouse has remarried and is now 62. Does the surviving spouse have the option to transfer the beneficiary IRA to an IRA in his own name without generating a 1099 to 1) delay RMDs and 2) provide the new spouse additional spousal beneficiary options if her were to predecease her?



Submitted by Alan - IRA critic on Mon, 2023-06-26 18:47

  • Yes, the surviving spouse can elect to assume ownership of the inherited IRA, and the custodian will transfer the balance to a new IRA account titled as owner, without a 1099R being generated. The new spouse would be shown as the beneficiary. 
  • There is no reason to delay assumption of ownership. However, it is interesting to consider the end result if the original surviving spouse does nothing. Beneficiary RMDs would not be required until the year the original owner would have reached 73. If the surviving spouse were to pass prior to the end of that year (2028), they would be treated as the owner by default rules, and the new surviving spouse would be an EDB. However, if the new surviving spouse were then to pass, they would not be treated as the owner and that may negatively impact the new surviving spouse’s beneficiaries.

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