Question

Seth named his wife, Monique, who is age 57, as the sole beneficiary of his IRA. He died before age 70½. Which of the following is correct regarding Monique’s options for the Roth IRA?

1 Monique must take a distribution of the entire amount of IRA funds within five years of Seth’s death.
2 Monique cannot roll over the funds into her own IRA.
3 Monique must begin taking distributions within one year of Seth’s death.
4 Monique can roll over the IRA funds into her own Roth IRA

Answer 1

Monique can roll over the IRA funds into her own Roth IRA and is not required to take distributions until the rules for her own Roth IRA require it.

Step-by-step explanation:

When Seth passed away before age 70½ and left his Roth IRA to Monique, who is age 57, she has specific options provided by the Internal Revenue Service regarding the inherited IRA.

The correct option regarding Monique's choices is that she can roll over the IRA funds into her own Roth IRA. Monique, as the surviving spouse, has the option to treat her husband's IRA as her own, which means she can effectively roll it over into a Roth IRA in her name. By doing so, Monique would not be required to take distributions until she is required to do so under the rules that apply to her own Roth IRA.