If the spouse creates a separate inherited IRA account by the separate account deadline, they can be treated as an EDB and avoid the 10 year rule. Under Sec 327 of Secure 2.0, they can also elect to be treated as the participant (for RMD purposes only), which will allow them to use the Uniform Table.This is a good idea. When the spouse inherits 100% of the t-IRA, the RMD amount remains same but the taxes on the RMD almost double because of the tax change from MFJ to single status. Leaving 50% to spouse and other 50% to the daughter reduces RMD and tax burden on the surviving spouse.
That said, many IRA custodians are not yet up to speed on Sec 327. The good thing is that IRA RMDs are not under the control of the custodian, so the beneficiary can control the amount of the RMDs if they understand the complex rules.
Statistics: Posted by Alan S. — Thu Feb 12, 2026 2:52 pm — Replies 4 — Views 177