Wife should elect to assume ownership of the inherited IRA ASAP. As the owner her 2024 RMD would be based on the Uniform Table and would be much lower than a beneficiary RMD, as she would be treated as the owner for the entire year and future years.

Either way, when son inherits the 10 year rule will apply with annual beneficiary RMDs required but if he inherits an owned IRA his annual RMDs will be based on his own single life expectancy. If he inherits a beneficiary IRA, his annual RMDs must follow mother’s RMD schedule, making his annual RMDs much higher than if he inherited an owned IRA. This is another reason for her to assume ownership of the inherited IRA soon.

But to answer your original question, if husband passed this year, her beneficiary RMD divisor in 2025 would be 10.5, but a sole spousal beneficiary does not have to reduce by 1.0 each year. Instead, they can “recalculate” by going to the single life table each year after the first year. Her 2026 divisor would be 9.9, 2027 9.3 etc. If son then inherits in 2027 his divisor would be 8.3 because the 1.0 reductions would apply for the son. The inherited IRA divisor would fall under 1.0 in 8 years, so his inherited IRA would not last the 10 years. But if he inherits an owned IRA he is a designated beneficiary, not a successor beneficiary, and his RMDs would be based on his own longer LE.

Again, better for both parties if she elects to assume ownership. This would be a non reportable transfer to her own IRA with no 1099R or taxable distribution until she actually takes her 2025 Uniform Table RMD.

And she must also complete husband’s 2024 RMD this year if he did not do so before passing and he was RMD age.

 

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