How the Spousal IRA Rules Work

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
• Pages: 68-100

68

HOW THE SPOUSAL

IRARULES WORK

Often, an IRA owner selects a spouse as the primary beneficiary of his /

her IRA. There are many rules that apply when the spouse is the bene-

ficiary of an IRA.

While an IRA owner is alive, then the IRA owner generally uses

the Uniform Lifetime Table in determining his / her required minimum

distributions from the IRA. The exception to the general rule applies

when the spouse is the sole beneficiary of the IRA account for the entire

year and the spouse is more than ten years younger than the IRA owner.

In that case, the IRS permits the IRA owner to use a special table found

in IRS Publication 590- B in order to determine the IRA owner’s required

minimum distributions. If the spouse dies or the parties are divorced in a

given year, then the spouse is still considered the sole beneficiary of the

IRA owner’s account for that year even though the spouse is no longer

the sole beneficiary for that given year.

The following are a few examples of how the lifetime distribution rules work

when the IRA owner has a spouse as the primary beneficiary of the IRA owner’s

account.

example 51

Todd, an IRA owner, is age 72 in the calendar year 2016. Mary, Todd’s

wife, is the sole primary beneficiary of Todd’s IRA for the entire calendar

year 2016. Mary is age 68 in the calendar year 2016.

Question: What period is used in determining Todd’s required

minimum distribution for the calendar year 2016?

Answer: The Uniform Lifetime Table must be used by Todd since

Mary is not more than ten years younger than Todd.

The number that must be used by Todd, who is age 72

in 2016, is 25.6 under the IRS Uniform Lifetime Table

How the Spousal IRA Rules Work | 69

(Table II). Therefore, Todd’s IRA account balance as of

December 31, 2015, is divided by 25.6 in order to deter-

mine Todd’s required minimum distribution for 2016.

example 52

Assume the facts in Example 51 except that Todd is age 73 in the calendar

year 2017 and Mary is age 69 in the calendar year 2017.

Question: What period is used in determining Todd’s required

minimum distribution for the calendar year 2017?

Answer: The Uniform Lifetime Table must be used by Todd

since Mary is not more than ten years younger than

Todd. The number that must be used by Todd, who

is age 73 in 2017, is 24.7 under the Uniform Lifetime

Table. Todd’s IRA account balance as of December 31,

2016, is divided by 24.7 in order to determine Todd’s

required minimum distribution for 2017.

example 53

Harold, an IRA owner, is age 72 in the calendar year 2016. Carol, his

wife, is the sole primary beneficiary of Harold’s IRA for the entire cal-

endar year 2016. Carol is age 50 in the calendar year 2016.

Question: What period is used in determining Harold’s required

minimum distribution for the calendar year 2016?

Answer: A special IRS table may be used in order to determine

the number that can be used to find Harold’s required

minimum distribution for the calendar year 2016. The

number is 34.9 and is based upon the following:

(a) Carol is the sole primary beneficiary of Harold’s IRA

for the entire calendar year 2016 and

(b) Carol is more than ten years younger than Harold.

According to the IRS, the joint life and last survivor expectancy table

found in IRS Publication 590- B can be used. The number under this

table for a 72 / 50 life expectancy combination is 34.9. Therefore, Har-

70 | Inherited IRAs

old’s IRA account balance as of December 31, 2015, is divided by 34.9

in order to determine Harold’s required minimum distribution for 2016.

example 54

Assume the facts in Example 53 except that Harold is age 73 in the cal-

endar year 2017 and Carol is age 51 in the calendar year 2017.

Question: What period is used in determining Harold’s required

minimum distribution for the calendar year 2017?

Answer: A special IRS table may be used to determine the num-

ber that can be used to find Harold’s required minimum

distribution for the calendar year 2017. The number is

34.0 and is based upon the following:

(a) Carol is the sole beneficiary of Harold’s IRA for the

entire calendar year 2017, and

(b) Carol is more than ten years younger than Harold.

According to the IRS, the joint life and last survivor expectancy table

found in IRS Publication 590- B can be used. The number for a 73 / 51

life expectancy combination is 34.0. Therefore, Harold’s IRA account

balance as of December 31, 2016, is divided by 34.0 in order to deter-

mine Harold’s required minimum distribution for 2017.

The next series of examples involve an IRA owner who dies before his / her re-

quired beginning date and who is survived by a spouse beneficiary of his / her

IRA account. The IRS rules for a spouse beneficiary of an IRA owner’s account,

under these circumstances, are not the same as the IRS rules that apply when a

nonspouse beneficiary is involved.

example 55

Assume that Jack, an IRA owner, died at age 60 in the calendar year

2016. Jack’s date of birth was June 1, 1956, and his date of death was

October 15, 2016. The sole primary beneficiary of his IRA account was

his wife, Jane, who survived him. Jane’s date of birth is May 1, 1961.

Jane is age 55 in 2016. Jane survived Jack. The contingent beneficiary