403b has no living beneficiary and the will directs to a brother of deceased owner

Can you transfer this 403b to an inherited estate IRA or inherited IRA and avoid taxation?



If the decedent has no spouse, then the plan beneficiary provision most likely specifies the estate of the participant as beneficiary. The plan will likely make a lump sum distribution to the estate which will be taxable in the current year.  The executor is not able to assign the plan benefit to an inherited IRA because a direct rollover is not allowed for a plan beneficiary that is not an individual.  This underscores that leaving an employer plan to an estate is more costly than leaving an IRA to an estate, since the IRA can be assigned out of the estate to the estate beneficiary. An employer plan cannot.



Add new comment

Log in or register to post comments