This may not be a problem as long as it is intentional, anticipated and coordinated with your estate plan. Flexibility and simplicity would generally suggest that you simply name your spouse as the outright beneficiary. Often, however, this would violate the IRA owner's personalized estate plan. Unfortunately, when it comes to protecting loved ones and minimizing taxes relating to sizable IRAs, simplicity is the exception, not the rule. If properly coordinated prior to your required beginning date, you can name your revocable trust as beneficiary of the balance of the IRA as of your death, payable under the installment method elected as of your required beginning date.
IRAs are rife with penalties when mishandled.
Higher and earlier payment of taxes to you or your beneficiaries will often be the result of failure to take timely action before your required beginning date, because choices not preserved are forever lost. You can avoid both confusion and potential losses related to IRA mistakes by carefully monitoring imposed deadlines and, of course, seeking the advice of a competent comprehensive estate planning attorney. The information provided on our home page is general in nature and designed to assist you in understanding complicated tax and estate planning concepts. We endeavor to be accurate in providing this information, but you should recognize that essential information regarding any one of these techniques may be omitted. And, of course, it would be unreasonable for you to act upon any of this information prior to consulting with your tax adviser or attorney based on your individual circumstances.