Inherited IRA
We have a Principal annuity. It was an IRA in clients husband’s name.
They moved it over to an inherited IRA in Wife’s name. She’s the spouse.
We’re trying to move that over to a spousal IRA, into Wife’s name directly, and so she doesn’t have to follow any of the 10-year rules or life expectancy rule. Is this possible?
Permalink Submitted by Alan - IRA critic on Fri, 2025-03-21 14:02
Yes, a sole spousal beneficiary can elect to assume ownership of an inherited IRA at any time. There is no deadline. Of course, if the spouse is not yet 59.5, she should likely not assume ownership until she reaches 59.5 to avoid owing the 10% penalty on distributions.
It the surviving spouse is 73 or older, and the decedent was under 73, she might also maintain the IRA as inherited because she would not have to take RMDs until the year the decedent would have reached RMD age. When decedent would have reached his RMD age, she could then assume ownership.