“re-establish an IRA by Operational Law”

Client passed away and had 2 IRAs in EIAs in which their Revocable Trust was named as beneficiary. Spouse is trustee. Spouse’s attorney said that those proceeds could be used for her to “re-establish an IRA by Operational Law” as long as the proceeds were rolled over in the 60 day time frame once she received the checks. She had to take the checks to her attorney to deposit into the trust then he in turn wrote her a check for the total, she deposited in her checking account then wrote check to EIA company. Is that accurate??



Generally. if the surviving spouse has unqualified rights of withdrawal from the trust, they can roll over the death benefit to their own IRA within 60 days. There have been several IRS PLRs authorizing this.  Of course, the surviving spouse has no obligation to roll the proceeds back into an annuity or other particular investment. The spouse could roll it over to any custodian of her choice. Most likely, the attorney was referring to “Operation of Law”, not operational law, meaning that the death benefit passes by beneficiary designation to the trust rather than through the probate process.



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