I am hoping someone can comment (explain) the answer the folks at the Slott report gave the beneficiary. I was under the impression when the estate inherits an IRA – the estate beneficiary is subject to either the 5 year rule or remaining life expectancy of the deceased account owner (as the answer discusses).

I was unaware a rollover is permitted.
Under what circumstances would a rollover be allowed?

Thank you

Mr. Slott,

My husband passed suddenly two months after we were married. He had a Traditional IRA. On this account, he had no beneficiary listed. Even though I am his spouse, they will not let me re-title or rollover this account. They told me this account must go to his estate. If I am his widow and the surviving spouse, why must I cash this account and pay taxes? ?

Answer:
A spouse is not automatically the beneficiary of an IRA account. It appears that the default beneficiary language in the IRA document has your husband’s estate as the beneficiary. Even though the estate is the beneficiary, that doesn’t mean that you have to cash in the IRA and pay taxes all at once. If your husband died before his required beginning date, which is April 1 after the year he was 70 ½, then you have 5 years to take the money out. If he died after his required beginning date, then you can take the money out over his remaining single life expectancy.

Assuming you are the beneficiary of his estate and have complete control over his estate’s assets, then you also should speak with a qualified advisor or attorney about the possibility of doing a spousal rollover through the estate to an IRA in your own name.