Beneficiaries who are NOT USA citizens
1. I am single, over 73, have no family [blood or marriage] but am closest to friends in New Zealand. Have both Traditional & Roth IRA’s, now in mutual funds. To extent I do not need to use them, would like to have largest amount go to very close friends in N.Z. Amounts are relatively small [under $400.000]. Also have Life Insurance to cover final exit costs. Cannot find section of either of Slott books I have addressing what to do?
2. What should I be doing to get maximum value [for self, & bewneficiaries] now? ❓
Permalink Submitted by Alan Spross on Wed, 2008-07-30 01:05
1) The IRA assets can be paid to a foreign beneficiary, however the withholding and other tax rules will depend on the tax treaty between the US and NZ. The IRA custodian may have special requirements in properly identifying the people before accepting them on their beneficiary form.
2) That’s an investment or asset allocation question and would require a ton of data to analyze your situation for a proper response.
Permalink Submitted by Al Fry on Thu, 2008-07-31 00:37
If we have a tax treaty with NZ, the benes can file a W-8BEN with custodian to avoid the 30% mandatory witholding. They must have a US SSN or Tax ID in order to file the W-8BEN. They can get a US Tax ID by filing a W-7.