Unconvert Roth of deceased

Submitted by Lynn M Diveley on Tue, 2011-04-05 17:48

A client converted some of his IRA to a Roth last year. He died unexpectedly last week. His IRA names his wife as beneficiary with his trust as contingent, but the Roth names his Trust as beneficiary of which she is the beneficiary and trustee. The children are contingent beneficiaries of the trust. Question – can this account be unconverted and if so by whom? If the wife, as Executor, could there be a problem due to the differing beneficiaries? Her attorney is trying to help with this too, but I wanted some thoughts. Thanks.

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Permalink Submitted by Alan Spross on Tue, 2011-04-05 19:07

Yes, the executor can recharacterize subject to the usual extended due date deadlines. See IRS Reg 1.408A-5, Q&A 6:

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(c) The election to recharacterize a contribution described in this A–6 may be made on behalf of a deceased IRA owner by his or her executor, administrator, or other person responsible for filing the final Federal income tax return of the decedent under section 6012(b)(1).

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OK per the IRS, but no guarantee that such action could not trigger a legal challenge.