Inherited IRA
IRA owner dies before RBD with spouse as sole beneficiary. IRA Custodial Agreement states that wife has option of a lump sum in cash or can put proceeds in beneficiary IRA. Lump sum is a taxable distribution according to their forms. If lump sum is taken and spouse wishes to put proceeds in her own traditional IRA under the 60 day rollover rules, is she permitted to do so? Current custodian will not transfer proceeds to her own IRA; only to an inherited IRA.
Permalink Submitted by Alan Spross on Mon, 2011-09-26 21:32
The surviving spouse can take a distribution and roll it into the surviving spouse’s own IRA within 60 days from the date of distribution. Sounds like the current custodian staff is not familiar with spousal options OR they just do not allow for the inherited IRA itself to be assumed, but perhaps would open a new IRA for the spouse’s rollover. But if not, the spouse has many other IRA custodians to choose from.
Permalink Submitted by mk foss on Mon, 2011-09-26 21:33
She can deposit a check into her own IRA account or open an inherited IRA and transfer that to her account. Often the custodian of her account can help make the funds transfer go smoothly.