Can money be put in an IRA by a surviving spouse
A client recently made asubstantial withdrawal from his 401k for medical expenses. Unfortunately, a week later he died. I’m trying to determine if his surviving spouse can use the 60 day rollover rules to put the money into her iRA to avoid the current taxes since she does not need the money for her own use.
Permalink Submitted by Alan Spross on Fri, 2009-12-11 03:56
Tom,
There have been dozens of letter rulings regarding the surviving spouse’s ability to do a spousal rollover and they generally are in favor of the surviving spouse. However, the situation depends on who the beneficiary is for the IRA and which entity inherits the probate assets. This brings into play the will or trust of the decedent, the possibility of disclaimers or even intestate provisions for the state, so this could become a complex “facts and circumstances” situation. Getting beyond all these details will probably exceed 60 days, but getting approval to extend the 60 day rollover period should be easy enough if the other facts are favorable.
Permalink Submitted by Bruce Steiner on Sun, 2009-12-13 00:21
Alan is correct that there have been numerous articles on spousal rollvers where the spouse was not the named beneficiary. I wrote an article on that, which was published in the October 1997 issue of Estate Planning: http://www.kkwc.com/docs/AR20050125164755.pdf.
But this involves a different issue. In this case, the participant took money out. He could have rolled it over into an IRA within 60 days. But he died before doing so. The issue is whether the his executors can complete the rollover, by rolling the money over into an IRA in the decedent’s name. For an example of this, see PLR 20071701.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL