Spous­es of deceased IRA own­ers have some choic­es for spousal dis­tri­b­u­tions and some spe­cial require­ments depend­ing on the sta­tus of the deceased.

Deceased Already Taking Mandatory IRA Distributions

In oth­er words, one of the spous­es was past age 70 ¹⁄₂ and had already start­ed their annu­al required dis­tri­b­u­tions before he/she died.  In this case, the sur­viv­ing spouse has the fol­low­ing choices:

Option 1 for Spousal Dis­tri­b­u­tions of Deceased of IRA owner
Just con­tin­ue to take manda­to­ry annu­al dis­tri­b­u­tions as the deceased spouse was doing. Rather than look at the RMD tables each year to get the “fac­tor” (the divi­sor) for each year’s dis­tri­b­u­tions amount, the sur­viv­ing spouse just reduces the divi­sor by 1 each year.  Let’s take an example.

Joe dies at age 75. He had already tak­en his required min­i­mum dis­tri­b­u­tion for the year. he had $100,000 in his IRA at the begin­ning of the year.  He divid­ed $100.000 by 13.4 (from RMD Table 1).  The fol­low­ing year, let’s assume that the IRA has $100,000, the spouse will divide $100,000 by 12.4 (13.4 — 1) and each year sub­tract 1 from the denominator.

Option 2 for Spousal Dis­tri­b­u­tions of Deceased of IRA owner
The oth­er alter­na­tive is for the sur­viv­ing spouse to put their name on the IRA or com­bine the assets into their own IRA.  The spouse will then need to take dis­tri­b­u­tions based on their own age.

If the sur­viv­ing spouse is younger than ag 59 ¹⁄₂, the best strat­e­gy may be to leave the IRA in the dece­den­t’s name.  That way, as a ben­e­fi­cia­ry (rather than the own­er of the IRA), the sur­vivor may take mon­ey out of this account at any time with­out penalty.

Deceased Not Yet Taking Mandatory IRA Distributions

If the IRA own­er dies before he was required to start dis­tri­b­u­tions (under age 70 ¹⁄₂), then the spouse again can remain as a ben­e­fi­cia­ry (and start tak­ing dis­tri­b­u­tions from the IRA when the dece­dent would have reached at 70 ¹⁄₂) or take own­er­ship of the IRA in their name.  I the lat­ter case, then spousal dis­tri­b­u­tions are based on the sur­vivor’s age.

Again, for a young sur­viv­ing spouse, it may make sense to leave the IRA in the name of the dece­dent so that with­drawals may be tak­en with­out penal­ty, if needed.