Additional Rollover from Deceased Spouse into same IRA-BDA Account – Is that allowed?
I have a client whose husband passed away in 2020 and the living spouse is currently age 54. At that time, the deceased spouse had an existing IRA that she kept as an IRA BDA Account since she was under 59 1/2. The deceased spouse also had a pension plan that was just terminated and the living spouse wants to do a rollover this year to another inherited IRA. Is she allowed to roll over the pension lump-sum into her existing IRA BDA Account since it came from the same owner or must she create a new IRA BDA Account to accept this new contribution? I believe it makes sense to rollover these inherited accounts to her own IRA after she is over 59 1/2 because the living spouse was younger than her deceased husband and that would give her a few more years before RMDs must start for her. Thank you in advance for your help.
Permalink Submitted by Alan - IRA critic on Thu, 2025-09-18 14:29
Rubic’s cube here.
I take it that the deceased spouse (referred to as surviving spouse 1 or SS1) was also a sole surviving spouse from a prior marriage and was able to defer beneficiary RMDs until the year that the first deceased spouse would have reached RMD age. SS1 then passed before beneficiary RMDs were required and after marrying the living spouse (SS2). In that case SS1 is treated as the owner of the inherited IRA and SS2 as the eligible designated beneficiary (EDB) rather than a successor beneficiary. That said, the Secure Act final Regs (as do the prior Regs) indicate that SS2 is NOT allowed to defer beneficiary RMDs until the year that SS1 would have reached RMD age. Therefore, beneficiary RMDs should have started for SS2 in 2021 using the single life table divisor for age 50, age 51 in 2022 (new 2022 table), etc.
If any of my assumptions are incorrect with respect to SS1, please advise as that would result in major changes.
For the pension plan SS2 is also the designated beneficiary, but because SS1 was the participant (not a beneficiary), SS2 does not have to start beneficiary RMDs until the year that SS1 would have reached RMD age and because that is different RMD treatment than for the inherited IRA, the direct rollover should go into a new inherited IRA account.
For both of these inherited IRAs, SS2 should elect to assume ownership at age 59.5, and any beneficiary RMDs would cease in that year. The two inherited IRAs can be combined into a single owned IRA at that time. Uniform Table RMDs will not start until SS2 reaches 75.
Permalink Submitted by Scott Garrett on Thu, 2025-09-18 15:31
I thank you for the answer and I apologize for not being more clear. In the present case, the deceased spouse and the Surving Spouse have only been married to each other. The husband died in 2020 and the surviving spouse (SS1) never remarried herself. When the husband died in 2020, SS1 inherited an IRA from the husband who was the original owner (and only 51) and since SS1 was under 59 1/2, kept that IRA as inherited with the option to wait and start RMDs when the deceased spouse would have turned 75 since he was born after 1960.
SS1 in 2025 now has a pension rollover where the pension plan owner was the same deceased husband who died in 2020 and wants to rollover the funds to an inherited IRA. Can she take the pension funds and roll them to the same Inherited IRA Account that was established in 2020 or must she create a new separate Inherited IRA to receive the pension funds?
I know the long-term plan is to rollover the amounts to her own IRA after she is past 59 1/2 but wanted to see if she would need to create 2 Inherited Accounts or could just use the existing one. I hope this is more clear.
Permalink Submitted by Alan - IRA critic on Thu, 2025-09-18 19:24
That makes the situation simpler.
Because the original owner was the same for each plan, and the direct pension plan rollover will be completed prior to the year the participant would have reached RMD age, the pension plan can be directly rolled over to the existing inherited IRA. The SS can then assume ownership of the combined inherited IRA upon reaching 59.5.