RMD & Spousal Inheritance
Husband, age 80, died 12/28/2024 and had taken his 2024 RMD from his CREF account prior to death. Account Beneficiary Wife, age 80, will roll over the funds to her own IRA. Does she have to take RMD on the inherited dollars prior to rolling over to her own account in this situation? Thank you!
Permalink Submitted by Alan - IRA critic on Fri, 2025-02-21 14:28
If wife assumes ownership of the inherited IRA, there is no distribution but wife will have to take a 2025 RMD using the Uniform Table by the end of 2025.
Conversely, if the wife took a distribution and did a 60 day rollover, the 2025 beneficiary RMD (which is higher due to the single life table applying rather than the Uniform Table) will not be eligible for rollover. Rolling over the RMD portion would create an excess IRA contribution.
Therefore, assuming ownership is the best way to proceed. Advantages include a much lower 2025 RMD, no 1099R or other reporting requirement for the assumption and no exposure to the one rollover rule per 12 months. Of course, the later Uniform Table RMD will generate a 1099R.
Maintaining the IRA as inherited subject to the higher RMDs will also result in spouse’s own beneficiary being treated as a successor beneficiary rather than a designated beneficiary. This is particularly detrimental if the spouse’s own beneficiary would otherwise have been an EDB (eg disabled or not more than 10 years younger than spouse). A successor beneficiary cannot be an EDB and would have to drain the account much faster under the 10 year rule.