A sole surviving spouse can assume ownership at anytime regardless of when their spouse passed in relation to their RBD. But Sec 327 of Secure 2.0 has added another hybrid option that could be useful in certain situations. If the spouse passed after RBD, the surviving spouse can now elect to be treated as the IRA owner, but only for RMD purposes. Under this election, the spouse could use the Uniform Table for RMDs instead of the single life table, and if the spouse was under 59.5, distributions would also be penalty free. Further, if the spouse passed prior to RBD, beneficiary RMDs (with Uniform Table) would still not have to begin until the deceased spouse would have reached RMD age.  Also, for deaths prior to RBD, the election to be treated as the owner for RMD purposes is automatically applied without request.

Therefore, the spouse could either elect to assume full ownership, could elect to be treated as the owner, or could first elect to be treated as the owner, then switch at the opportune time to full ownership. Once full ownership occurs (IRA no longer shows deceased name), that decision is irrevocable. And the decision to be treated as the owner for RMD purposes is also irrevocable, except to assume full ownership.

These new options will cause confusion, not only for spouses, but also for the IRA custodians until they are fully trained on the proposed regs for Sec 327, which were just released.

• Flag as spam
• Log in to Reply