@jjf2008 I am so sorry for your loss.
I am most familiar with IRAs but I believe the rules are the same for these issues. Please verify that with your advisors (see below for recommendations)
In this I assume that your husband designated you as his only beneficiary on the plan. If he didn't have a bene designation and it goes through his estate ask again because the complicates things.
If you didn't take any distributions from the account during 2020 then you do not need to report for income-tax purposes in 2020. This is for two reasons.
- the COVID-19 relief bills waived all RMD requirements for 2020. So no there are actually no RMDs for anyone in 2020.
- your husband was too young to have been required to take RMDs. If he had been older and had an RMD requirement either he or you would have had to take it in 2020.
- your RMD do not start until the year after the account owners death so 2021 here.
| Does the IRS required RMD by a certain age for 457 Plans inherited?
Yes. It was 70.5 but now it is 72. Since you are older than that you will need to start RMDs in 2021. Make sure you figure this out (see below for some suggestions) in plenty of time to take the RMD in 2021 (e.g. don't leave it until December). The penalties for not taking the RMDs are huge.
| If they do, whos age does the IRS go by? My husbands age at death, or my age?
They go by your age because your husband had not yet reached the required min age. If your husband has started his distributions I think you choose could have stayed with his schedule (based on his age) or used your own age. You should verify that with you advisor but I think it's right.
| Can the 457 plan funds just sit in the account without any action on my part?
You should call up the 457 plan custodian and get the account re-titled in your name. I'm not sure how they do that for 457 for for an IRA if your husband was John Doe and you're Jane, his account would be something like: John Doe IRA and after you inherit it would be Jane Doe IRA beneficiary of John Doe.
One of the reasons you should do that now is so that you can pick a beneficiary should you pass, rather than your estate (which might require probate).
You don't have to change the investment options if you don't want to.
| Is there a maximum number of years the 457 Plans must be dissolved?
No. The RMDs must be taken each year. The are calculated so that if one lives to the average life expectancy and there is [edit] no appreciable gains in the account it will all come out in the year of death. But in with good investment returns (or premature death) there can easily be a lot of money left in the account.
Note the RMD is a minimum. You can always take more out if you need to spend the money (but there will be taxes on it, so usually better to spread it out).
I'll do another message about advisors.
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