IRA req'd min distribs - split calc for husband & wife?

[Lorraine Dorsa]

One of my clients has asked me about a method of calculating minimum distributions in which the IRA is somehow split between the husband (IRA owner) and wife (beneficiary) and separate calcs are done on each part. Apparently, as he understands it, you could use joint life expectancy for his portion and single life expectancy for his wife.

I've never heard of this and asked him to send me the information he received from his source describing this method. Has anyone heard of this?

[Kathy]

I have never heard of this either. I wonder if he simply misunderstood the ability to recalculate the life expectancy of one spouse and not recalculate the life expectancy of the other (might be useful if one spouse has reason to believe his or her life expectancy is shorter than the average). However, if you use the single LE for the spouse and joint for the other, you would really be taking larger distributions than absolutely required so I think it might be ok?????? The question is, what happens when one spouse passes away?

[Lorraine Dorsa]

Yes, it was also my guess that he was thinking of the option to recalc one spouse but not the other, but he insisted it was not that, so I thought I'd post the question to see if anyone else had an idea what he was talking about.

I agree that if you don't recalc one you don't get the absolute minimum amount possible, but the difference is often not enough to make a difference.

It is my understanding that the general wisdom is to recalc participant, but not recalc spouse. This way, if the spouse dies, you can continue to use spouse's life expectancy (it reduces by 1 each year from start date) in the minimum distributions. If you recalc'd the spouse's life expectancy, it drops to zero upon death which results in a large increase in the minimum distribution.

[Guest breezer]

I believe that an IRA is registered to one person by Social Security number. You can not re register IRA assets in another name with out creating a taxable event except in the case of death and the spouse is beneficiary.

What your client may be thinking is that you can have multiple IRA accounts in one name and you can determine different minimum distributuions for each one ( joint life on one single life on another)