IRA Contributions After Death

Friday, August 23, 2013

By Beverly DeVeny, IRA Technical Expert

Follow Me on Twitter: @BevIRAEdSlott

The general rule for making IRA contributions after an individual dies is that you can’t.

For instance, let’s say that Michael, age 55, earned $50,000 before he died in 2013. If he has not already made an IRA contribution for the year, his spouse, or the representative of his estate, cannot make a contribution for him after his death. IRS has a very logical explanation for this rule – there is no need for a deceased person to save for their retirement. It is hard to argue with that logic.

However, as is the case with many of the IRA rules, there is an exception. Let’s say that Michael is married to Kelly. Kelly lost her job during the recession and has not been able to find another job. Michael has been making spousal IRA contributions to Kelly’s IRA for the last couple of years. We know that there can be no contribution to Michael’s IRA now, but can a spousal contribution still be made to Kelly’s IRA?

Generally speaking, the answer is yes. As long as Kelly files her tax return as married filing jointly, she will be able to make an IRA contribution to her IRA based on Michael’s earned income. There is still a need for Kelly to save for her retirement.

For expert advice on these and other IRA questions after the death of an IRA owner, you can find an Ed Slott trained advisor on our website, www.irahelp.com.

 

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