Ask Terry Questions Transfer of inherited IRA to spouse after death of wife

Transfer of inherited IRA to spouse after death of wife

By Terry Savage on June 03, 2023 |

My wife and I both had inherited IRA’s from a long time friend who died in December of 2018. After my wife’s death in February of 2023 Schwab transferred the IRA over to my account, and kept it separate. Vanguard transferred it over and placed it inside my inherited IRA. Are both methods of transfer correct?

If both are acceptable how do I determine my RMD for the Schwab account? The original owner passed before 2020 so the RMD’s could be spread over a lifetime. However, my wife’s passing was after 2020 and RMD’s must deplete the IRA in 10 years. Schwab makes you figure your RMD so whose date of death do I use; the original owner or my wife’s, and do I have 10 years or my lifetime for RMD’s?
Thank you for any help you can provide to help clarify these questions.

Terry Says

This is complex and I can’t really answer because you didn’t give me your age, or her age, and tell me whether she had already started taking RMDs.
So please read this linked article, explaining all the rules for inherited spousal IRAs.

I am guessing, but if she hadn’t started taking RMDs, you might want to go back to Vanguard and tell them they made a mistake, and you want HER IRA transferred into a spousal inherited IRA for yourself –and not into the one that you had already inherited from a friend.
Give them the specifics of her RMD status and age at death, and ask them if it doesn’t change your withdrawal options from HER IRA — making it essential to keep them separate.
And, please write back and let me know what they say!

Recent Questions

money

ASK TERRY

a personal
finance question