Surviving spouse's options after death of IRA owner

[Guest Edward McElroy]

An individual died after payments had commenced from an IRA. Payments were based on individual's life expectancy (not recalculated. Individual's spouse is beneficiary. (1) What are her options? (2) Over what period is she required to receive distributions from the IRA? Any thoughts? Thanks. Ed

[Guest Gary Tencer]

Spouse beneficiary may rollover entire account balance(including req. dist. not already withdrawn for year of death) to IRA in her name and name new beneficiary.

If she is already over 70-1/2, she has until 12/31 of year following year of death to begin req. dist. based on her and the new beneficiary.

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[Dave Baker]

I agree that a surviving spouse always has the rollover option, whether or not the decedent had passed his required beginning date (April 1 of the calendar year after the calendar year in which he attained age 70-1/2).

When you say "payments had commenced" by the date of the IRA owner's death, do you mean he had passed his required beginning date already?

[Kathy]

The spouse has a multitude of options, depending on her situation. If he was in distribution status because he passed his required beginning date and she was the designated beneficiary of the IRA as of his required beginning date, even though he was taking distributions over his single life expectancy, he might have been taking more than the required minimum distribution because he could have been taking over their joint life expectancy. You should take a look at the IRA document and the bene designation as of his RBD. She could possibly elect to leave the IRA in his name with her as bene and continue payment over their joint LE, especially if he elected not to recalculate his LE. Or she could postpone distribution from his account until he would have reached age 70 1/2 if he had not yet. Or she could choose to treat it as her own IRA, with her own bene. If she does that and is under 59 1/2 she then limits her ability to withdraw because penalties could apply. If she's over 59 1/2 and less than 70 1/2, she could postpone distributions until she turns 70 1/2 if that is her goal. If she needs money now, she could begin distributions based on her joint LE with her designated bene. She has lots of choices, depending on whether she needs money now or not, her age, her health, etc....