Ed Slott Quiz – Widow(er) Tax Penalty and Inherited IRA Rules: EDU #2611

Chris's Summary
Jim and I discuss the Ed Slott quiz questions from his November advisor training, opening with the widow/widower tax penalty and required beginning dates for IRA required minimum distributions before moving into inherited IRA rules — year of death RMDs with multiple beneficiaries and the deadline for satisfying them, spousal rollover options, and spousal RMD timing.

Jim's "Pithy" Summary
Chris and I dig into the Ed Slott quiz from my November advisor training — 20 questions, open book, and I scored 100 this time. We have been doing this for years and it is not just a matter of asking the question, giving the answer and moving on. We get into the rabbit holes, explain the nuances, and use it as a chance for everybody listening to test their own knowledge.

We open with the widow/widower tax penalty and required beginning dates for IRA required minimum distributions — and the widow/widower question has nothing to do with IRAs but everything to do with retirement planning. The younger a spouse passes away the more intense the penalty, and the longer both of you live together the less it bites.

From there we get deep into inherited IRA rules, which make up the bulk of the episode. How year of death RMDs work when there are multiple beneficiaries, and what the deadline is for satisfying them — there is a question in here that Ed Slott himself argued both sides of for years because the IRS never gave guidance until July 2024. We close on spousal rollover options and RMD timing rules that only apply to surviving spouses. A spouse has choices that no other beneficiary has, and the decision of which way to go can look very different depending on the ages involved. Chris makes the point well — whenever a spouse dies, hit the pause button before you do anything.