Reversing a Spousal Rollover
Non-Client elderly spouse rolled over recently deceased spouse’s IRA 2 months ago without consultation, 1 week after spouse’s death. She did rollover since she wanted control at time and did not want it exposed to stock market. Surviving Spouse and kids now wish to try to reverse the spousal rollover and move back to deceased’s IRA so that mom can disclaim IRA of deceased spouse. She is ill and wants to get assets out of her estate for kids now.
Can a spousal rollover be reversed? If so, what is the reg/ruling/authority to do so? Thank you.
Permalink Submitted by Alan Spross on Fri, 2012-09-28 21:20
There is no option to reverse a spousal rollover, once done. This would also eliminate the qualified disclaimer option.
If there is any dementia involved here and the amount justifies the expense, she could pursue a letter ruling, but the disclaimer issue further complicates that.
Permalink Submitted by Bruce Steiner on Fri, 2012-09-28 22:00
If this happened recently, the deceased spouse’s estate can elect portability. Under current law, portability expires at the end of this year. However, there’s a good chance it will be extended or made permanent.
She might consider converting to a Roth, either all at once or over time.
Permalink Submitted by Alan Spross on Fri, 2012-09-28 23:24
Does she want this out of her estate for estate tax reasons, Medicaid planning, or just an emotional decision?