Spousal Rollover when Ex-Wife inherits 401(k)
A woman inherited the 401(k) plan of her ex-husband.
The woman divorced the owner of the 401(k) plan many years ago.
The woman has remarried.
The woman is the primary beneficiary of her ex-husband’s 401(k) plan.
Can the woman do a spousal rollover and rollover the inherited 401(k) plan to a TIRA that she owns or must she rollover the inherited 401(k) plan to an inherited TIRA?
Permalink Submitted by Alan - IRA critic on Mon, 2015-06-15 16:19
Since she was no longer the spouse of the decedent, she is a non spouse beneficiary of the 401k account. She cannot roll it over to her own IRA, but should be able to roll it to an inherited IRA. Since the account must remain titled as inherited, her RMDs are also subject to the non spousal beneficiary rules. There will be no early withdrawal penalty as all distributions should be coded as death benefits. Note that since she is a non spouse beneficiary, she has the additional option of a direct rollover to an inherited Roth IRA.
Permalink Submitted by Robert Wright on Mon, 2015-06-15 17:36
Thank you very much Alan.