Military HEART Act Family SGLI and Roth IRA
Hello,
I am a financial advisor and am currently working with one of our clients who is an active service member with the U.S. Army. She is currently covered under SGLI for $400K and the Family SGLI which provides $100K for the spouse and $10K for each child. Her husband recently passed away, who was [u]not[/u] a service member, and she received $100K from the FSGLI. I know that the new Heart Act allows survivors of service members, who receive SGLI benefits, to deposit the proceeds within a Roth IRA, but does this also apply to the Family SGLI where the service member’s non-military spouse passes away? Would she be able to setup a Roth IRA as well and deposit the $100K to grow tax free. I cannot find anything specific to this topic. Any help is appreciated.
Brandon
Permalink Submitted by Alan Spross on Wed, 2009-09-30 01:43
The military death gratuity portion requires the decedent to be in the military, but the SGLI payment is not so restricted anywhere in Sec 109 of the Heart Act. Therefore, the beneficiary should be able to do the Roth rollover even though the husband was not in the military.