IRA Beneficiary NRA

Are there any drawbacks in naming a non resident alien as benificiary of an IRA or 401k?



  • Make sure the financial institution will set up an inherited IRA for the nonresident alien.  Some will, but many won’t.
  • Check to see if the person’s home country will respect the status of the IRA as an IRA for its tax purposes and will only tax distributions (with a foreign tax credit if there’s any U.S. tax).  In other words, make sure that the other country won’t treat the IRA like a taxable account and tax the income and gains in the IRA.
  • Another possibility is to leave the IRA in trust rather than outright.  That may make it easier for the trustees to set up an inherited IRA and receive the IRA distributions.


Thank you for the response, it’s much appreciated.



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