Spousal Beneficiary Inquiry
Hello,
My client Nancy died in 2017. She was in her 50’s and left her IRA to her spouse. Her spouse did a spousal inherited IRA (did not treat as his own). He then passed away in 2025 (before the year his wife would have reached RMD age), so he had not started taking any RMDs.
The beneficiary of the spousal inherited IRA is his new wife after re-marrying. Would the new wife be able to treat the assets as her own since RMDs had not yet commenced? Or would she need to move the assets to a beneficiary IRA and follow the Post-SECURE Act 10-year rule?
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2025-08-26 23:45
One of the more confusing RMD rules applies here.
The general rule that applies is if the surviving spouse passes prior to the date beneficiary RMDs would be due (in this case, the end of the year that original owner spouse would have reached RMD age, the surviving spouse is treated as the owner. However, this rule does not apply to surviving spouse’s of the surviving spouse.
This rule is the same as it was prior to the Secure Act.
The result is that while the first surviving spouse is treated as the IRA owner upon their death, the second surviving spouse cannot wait until the first surviving spouse would have reached RMD age before beneficiary RMDs would have to begin. But the second surviving spouse still has the option to assume ownership of the inherited IRA, which provides an escape from the complex beneficiary RMD rules.
Permalink Submitted by Kevin O'Hearn on Wed, 2025-08-27 08:44
Thank you Alan. When you say “assume ownership” are you saying that the surviving spouse has the ability to treat the assets as her own and move them from the spousal IRA BDA toa Traditional IRA in her name?
Permalink Submitted by Alan - IRA critic on Wed, 2025-08-27 10:41
Yes.
Of course, it is possible to experience blowback from the IRA custodian when they are asked by the SS of the SS to assume ownership because there is confusing example in Pub 590B addressing this rule.
However, the final Secure Act Regs (even though this situation was not affected by Secure) contain more specific wording. The only restriction for the SS of the SS is that if they continue to be treated as the beneficiary, they cannot delay the start of RMDs until the SS would have reached RMD age.
But because the SS who passes prior to their first beneficiary RMD year is still treated as the owner, the SS of the SS is not a successor beneficiary, they are an EDB and they can also assume ownership of the twice inherited IRA.