There are two options available to you if your spouse dies on or after his/her Required Beginning Date (RBD). You may use the Traditional IRA Required Death Distribution or the ROTH IRA Required Death Distribution election form to choose either of the options below.
Option 1 – Treat the Account as Your Own
This is almost always the most tax-efficient choice. However, in order to effect this election you must first make sure that your spouse’s Required Minimum Distribution has been taken for the year of death. Once the RMD has been satisfied, you may retitle the account and begin treating it as your own.
Once the account has been retitled, you would begin following the RMD rules, as they apply to you specifically. If you are also over age 70½, your first RMD from the newly retitled account would be the year after the death of your spouse.
Option 2 – Leave the Account in Your Spouse’s Name
This option is hardly ever more beneficial than Option 1, above. The main reason is that any RMDs due will be calculated using your age against the Single Life table, as opposed to the more generous Joint Life table available to accountholders.
If you choose this option, you would begin calculating RMDs based upon your age and the Single Life factor in the year following the year of your spouse’s death. In the year of your spouse’s death, you would calculate the RMD for your spouse, as if he/she were still alive at the end of the year.