Incorrect Beneficiary IRA Election
Met with a prospect today. Here husband passed away last November with an IRA at Vanguard. He was RMD age and several years older than spouse.
In December last year, a rep advised her to ‘Inhert’ the IRA instead of electing a Spousal Assumption – resulting in a Beneficiary IRA vs her own IRA. As a result, the surviving spouse has an almost $30,000 RMD for 2023 vs $18,000 if it was her own.
No funds have been taken out of the account since the account was changed.
Is it too late to go back and request the account be re-established as HER IRA vs a Beneficiary IRA?
Permalink Submitted by Alan - IRA critic on Mon, 2023-11-13 21:25
It’s not too late, because if she now elects to assume ownership of the inherited IRA, she will be treated as the owner for the entire year of 2023 and her RMD will be calculated using the Uniform Table. The rep provided flawed advice. Finally, she was required to complete husband’s 2022 RMD if he had not done so before passing. She had until the due date for their final joint 2022 return to do that.