Mechanics of a Spousal IRA Rollover

When a surviving spouse inherits a deceased spouse's IRA, that spouse has options for how to treat the account. The spouse may (1) elect to treat the IRA as their own, (2) execute a 60-day rollover or (3) execute a direct transfer into a new IRA. Practically, option three is the safest and most common option (many IRA custodians do not allow a surviving spouse to simply treat the account as their own). With a direct transfer, the spouse can directly transfer any required distribution for the year into the new IRA (the surviving spouse may have a year-of-death RMD obligation if the deceased spouse was taking distributions when they died). The RMD can then be taken later in the year. If the surviving spouse is not yet 73, no further RMDs will be required until reaching their own required beginning date because the IRA is treated as the surviving spouse's. For more information on a surviving spouse's options when inheriting an IRA, visit Tax Facts Online. : Q 3690.