Consolidating inherited iras
If the spouse keeps the IRA as an inherited IRA, she has no RMDs until the deceased account owner would have been 70 ½.
A spouse beneﬁciary must use the Single Life Expectancy Table, but goes back to the table each year to get the factor to use in calculating the RMD. A younger spouse under age 59 ½ who inherits an IRA should consider leaving the IRA as an inherited IRA.
If the IRA owner died before his required beginning date (April 1 of the year after he turned age 70 ½), then the beneﬁciary must use the 5-year-rule.
If the IRA owner died after the required beginning date, funds must be distributed using the single life expectancy of the deceased account owner. A spouse beneﬁciary can only use the Single Life Expectancy Table.
Once the spouse attains age 59½, the inherited IRA should be moved to an IRA in her own name. If a spouse beneﬁciary takes a full distribution, the spouse could roll over the funds, minus any required minimum distribution for the year, into an IRA in the spouse beneﬁciary’s own name. Only an account owner can make annual contributions to an IRA.
Arm yourself with working knowledge of some of the Do’s and Don’ts, and work with a competent, educated ﬁnancial advisor to keep more of your assets and lose less to taxes and unnecessary fees.
Non-Spouse Beneficiaries Only move the inherited funds as a direct transfer.
A spouse beneﬁciary who makes the inherited IRA her own IRA will use the Uniform Lifetime Table.
In either case, the spouse goes back to the table each year to ﬁnd the correct factor for determining the required minimum distribution for each year.These accounts should not be combined since there were two different beneﬁciaries – you and the trust.