Spousal rollover

Submitted by Sten Lindquist on Mon, 2022-06-13 17:53

IRA owner takes a distribution and dies two weeks later with the proceeds from the distribution in their checking account. Can the spouse beneficiary of their IRA rollover to their own IRA within 60 days?



Submitted by Alan - IRA critic on Mon, 2022-06-13 18:41

  • Maybe. Depends on how the IRA custodian views the inconsistent stream of PLRs issued over the last two decades on such post death rollovers in the context of this situation. If the spouse is also the executor, that will bring in more positive PLRs that could make the custodian more willing to accept the rollover. But if the custodian will not cooperate or requests that the spouse pursue their own PLR, the roughly 20k cost of doing that might make the effort impractical. Of course, the amount of this distribution is key. Finally, if such distribution was an RMD it could not be rolled back.
  • Some of the positive PLRs required that the spouse could roll the funds into a newly established IRA with no beneficiary, meaning the estate would likely be the beneficiary and then the spouse who is also the sole beneficiary under the will would have to assign the inherited IRA out of the estate to herself. Tons of possible red tape.
  • In short, the procedures of the IRA custodian are critical to completing the rollover without an expensive PLR. The beneficiary should ask for the custodian’s resident expert to talk to, and hope that the custodian has one.

 



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