Beneficiary IRA
Daughter is beneficiary of recently deceased father’s IRA accounts. A beneficiary IRA account is being established. One of the IRA’s is being transferred via trustee to trustee transfer. The other one was at a bank along with some other non-qualified accounts. The bank already closed the accounts out and sent the daughter a check for the total of all the accounts. Can the daughter ‘rollover’ the IRA amount into the beneficiary IRA? If not, any suggestions to how it can get in there (go back to the bank?)? Thank you.
Permalink Submitted by Alan Spross on Thu, 2011-12-29 19:50
She should return the uncashed check to the bank and ask that they re establish the inherited IRA as before so she can do a direct trustee transfer if she wants to change custodians.
This will be a tougher sell if she asked for the distribution and the bank refuses. In that case, she will have to try to talk them into it, explaining the taxable consequences to her if they do not reinstate the account. She might tell them she was not thinking clearly after her father’s death. This should be addressed ASAP since the bank is about to prepare their tax reporting for 2011.
The chances of the bank cooperating will decrease for each day that passes from here.
There is no IRS exception to the direct transfer requirement. If all else fails, the bank did this without her request, and the amount is sufficient to support the costs, she might pursue a private letter ruling from the IRS. But that would be a last resort.