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Special Distributions for retirement benefits for Spouse.

By David M. Goldman

There are some special issues with naming your spouse or leaving retirement accounts for participants spouse.

1) Can delay distributions until spouse reaches 70 1/2.

2) If the spouse dies prior to reaching 70 1/2 the distributions will have to be made within 5 years.

3) Spousal role over. Surviving spouse can roll over money to her own IRA. This is the best option. If the participant leaves it to the trust it will be distributed by the time she reaches her life expectancy. But as owner of the IRA, the IRA will e worth more each year. The retirement plan will typically be depleted when she is in her 90's.

There is no deadline for a spousal roll over but it must occur during the life of the beneficiary.. The longer you wait the less the account will be worth because of AMTs. The executor of a spouse cannot exercise the option to roll over the retirement account.

Full post as published by Florida Estate Planning Lawyer Blog on January 12, 2009 (boomark / email).