How to title multiple ROTH IRA Conversions
I have a question about converting traditional IRAs to Roth IRAs over a period of years. You state that it would be good to establish separate Roth IRAs for each conversion so that they could be recharacterized if necessary. What identifies Roth IRAs as separate IRAs. Does it require a different IRA custodian? If it is the same custodian, does it require different name for the IRA owner, or does it require a different account number, or could it simply be invested in different funds in the same mutual fund family. If it does require a different title for the IRA owner, what would you suggest? i.e. Owner’s Name – 2010 Roth Conversion; Owner’s Name – 2011 Roth Conversion.
A similar question would be how do you go about breaking up an IRA to establish different beneficiaries for each? Would the different IRAs require different names, i.e. Owner’s Name – IRA beneficiary AAA, Owner’s Name – IRA beneficiary BBB?
Thanks for your help.
Permalink Submitted by mk foss on Fri, 2009-09-18 17:13
Separate account numbers are all that is needed for multiple accounts.
If you convert to a “new” Roth account, you can combine the new account with the existing account once the recharacterization date has passed (October 15 of the year following the conversion). You can do some of the other things that you’ve suggested: different custodians, different names, etc but the account number is the key item and is easier to work with.
You can split an IRA (either traditional or Roth) into separate accounts and name a beneficiary for each. Again, the separate account numbers are the key. There was a flap a few years ago with Vanguard where they wanted all IRAs from one owner to have the same beneficiary. You need to be certain that the custodian has no problem with multiple IRAs with different beneficiaries.
Another choice is to list multiple beneficiaries on one IRA. In that case, the beneficiaries have until December 31 of the year after the owner’s death to split the account into separate beneficiary IRAs.