RMD for spouse of deceased participant

[rfahey]

Client dies at age 68 in 2000. Wife is beneficiary of his Profit sharing balance. She is 68 in 2002. He would have been 70.5 in 2002. She has never touched his plan monies since he died.

Does she have to take RMD in 2002 becouse of his age? Or can she wait until SHE is age 70.5 ??

Thanks

[jevd]

Check your plan document first for any restriction on the benefit payout.

The default under the regulations is the life expectancy payout withon 1 year of death. There is a grace period for this type of distribution if all previous distributions are made current by 12/31/2003. See Reg 1.401(a)(9)-1 Q2 (B)(2)

The next choice is all amounts paid within 5 years.

The Spouse may also roll the entire amount to an IRA or other plan of his/her own.

See 1.401(a)(9)-3 for rules regarding death before RBD & also 1.401(a)(9)-5 for additional information.

Merry Christmas to all and to all a GOOD NIGHT.

[jevd]

In addition to last post. Spouse may also wait until client would have been 701/2 and start taking distributions based on his/her L.E. Sorry for typo above. s/b within.

Again check plan for allowed options.

and again good night.

[mbozek]

Under the (a)(9)-3 reg cited above at Q/A-3(B), the surviving spouse must take a MRD by the end of the year year the owner would have attained age 70 1/2 (2002). However, the spouse could rollover the IRA balance to her own IRA by 12/31/02 to avoid taking a MRD in 2003.