Beneficiary Rollover

[DTH]

A non-owner participant age 72 working on a full-time basis died in November 2013 before his required beginning date. The only designated beneficiary is the participant's spouse. The spouse wants to directly rollover the entire accunt balance in 2013. The plan allows the beneficiary to elect either the 5-year rule or life expectancy rule. If the beneficicary elects the life expectant rule, the beneficairy's RMDs would begin in 2014.

Is a 2013 RMD due?

Had the participant lived and retired in July , and requested a direct rollover in 2013, the RMD would have to be paid before the rollover could occur even though he could have deferred his first payment until his required beginning date (i.e., 4/1/2014). An arguement could be made that to the extent the participant died before he retired and before his required beginning date, there is no participant RMD due for 2013. The spouse may directly rollover the entire account without taking a 2013 RMD.

Please let me know what your thoughts are. Thanks.

[ETA Consulting LLC]

There is no RMD due in 2013 because the participant has died before their required beginning date. Hence, the spouse may directly roll over the full account balance into their own IRA. You should also note that the beneficiary is the spouse; not sure how the 5 year rule would apply.

Let's assume the participant was age 50 and died. Since the beneficiary is the spouse, no distribution would be required until the participant would've turned age 70 1/2. That's like 20 years.

But, to answer your question; the spouse may roll over the entire balance.

Good Luck!