Distributions to a beneficiary's beneficiary.

[katieinny]

IRA holder names his son as the beneficiary under his IRA and dies after his RBD. Now it's an inherited IRA and the son elects to take distributions over his own life expectancy. The son names his wife as his beneficiary. He dies. His spouse thinks she can roll the IRA over to her own name, which can't be done unless I'm way off base.

However, she does need to continue distributions.

Does she continue to take them over her deceased husband's life expectancy?

Does she take them over her own life expectancy?

Does the 5 year rule come into play? Or none of the above.

[RTK]

Here's my stab at this based on final 401(a)(9) regulations.

When the IRA owner died after rbd, assuming son is designated beneficiary, regs would permit distribution (beginning with calendar year following calendar year of death) to be made over longer of life expectancy of son or life expectancy of IRA owner.

When the son dies, the son's wife cannot "rollover" the IRA into her name. (I believe that a spouse must be the beneficiary of the IRA owner in order to treat the beneficiary interest as the spouse's own IRA.) She could continue payments from the IRA using deceased husband's remaining life epectancy. She cannot use her own life expectancy. The five year rule applies to death before rbd.

If I recall, you could get to similar result under the 1987 proposed regulations. However, at the death of the IRA owner after rbd, the remaining life expectancy of the IRA owner (or remaining joint life expectancy of IRA owner and designated beneficiary would be used for distributions to son). Note that the IRA owner's life expectancy could be recalculated under 1987 regulations, which could result is a zero life expectancy at death.

In any case, the distribution provisions of the IRA documents should be reviewed .