Hi Bruce. It is interesting to first examine the old RMD rules with respect to the election of the 5 year rule for a sole spousal beneficiary. First, although the 5 year rule was rarely elected due to disadvantages in most cases, the spouse COULD make that election and no annual RMDs would be required until the 5th year. There was an added risk here, since if the spouse took a distribution in the 5th year, it would have been an RMD and could not be rolled over, and that distribution could well have been the entire account balance. That said, if the surviving spouse elected to assume ownership in that 5th year, they would have successfully accomplished the spousal rollover.
Moving from there to Secure, the 10 year rule has replaced the 5 year rule for non EDBs regardless of when owner passes, and LE RMDs disappear. But it’s not clear if a surviving spouse EDB can still elect that 10 year rule, avoid annual RMDs, and then elect to assume ownership anytime prior to the end of year 10. Or is LE the only option for EDBs?
I see the “conflict” you cited as not being 5 years v 10 years, but rather LE v 10 years. 5 years is definitely out except for non DBs, but the way I read it a surviving spouse and other EDBs still have the option to elect the 10 year rule AND regardless of when the owner passed. There are risks of making this election, and disagreement over this option as well. The IRS will have to clarify this, but historically surviving spouse beneficiaries have always enjoyed the broadest of options.