Situation:
Ira owner and spouse recalculate ages each year for minimum distribution requirement. Both 80 years old.

1) IRA owner dies first. Spouse rolls Ira into her name. Can she name a new beneficiary (son) and use the combined ages to calculate distribution? Must she continue to recalculate her age?

2) What if spouse dies first? Is the distribution continued using just the IRA owners recalculated life or does it continue on the joint life calculation? Can IRA owner name new beneficiary and incorporate the younger persons age in calculating distribtuions? (no more than 10 years apart).

What happens when IRA owner is the last to die? Does non-spouse beneficiary have to take all out by Dec. 31 of year following year of death? Or is there any way the beneficiary can continue distribtuions using his own life expectancy?

Thanks for any help.

See my column on this issue in the September/October 1999 issue of the CCH Journal of Retirement Planning. To subscribe, see their website at www.cch.com.

If the spouse dies first, consider a Roth conversion (if the IRA owner will qualify), or a charitable remainder trust as beneficiary.

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Bruce Steiner, attorney
(212) 986-6000 (NY office)
(201) 862-1080 (NJ office)
also admitted in FL

I can think of relatively few situations in which the election to Annually Recalculate the life expectancies of both the participant and the beneficiary is a good choice.

To be sure, you get a SLIGHTLY smaller MRD than if you used Term Certain, and the distributions will last longer, but at the risk of requiring heirs to lose any opportunity to stretch out distributions.



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John L. Olsen, CLU, ChFC
Olsen Financial Group
St. Louis, MO