Dormant Roth IRA
Does the custodian of a dormant Roth IRA need to wait until the owner turns or will turn 72 before they escheat to the state? Or would normal escheat rules apply?
Does the custodian of a dormant Roth IRA need to wait until the owner turns or will turn 72 before they escheat to the state? Or would normal escheat rules apply?
Permalink Submitted by Alan - IRA critic on Sun, 2021-09-26 02:25
Escheatment of IRAs is governed by a complex web of federal and state laws, so there is no “normal” rule to determine the exact circumstances under which an IRA is escheated. And due to the complexity of these rules, it is likely that they are not uniformly executed by IRA custodians. The best advise for an IRA owner is to make sure the address of record remains current, and then to act right away if notified of pending escheatment. Such escheatment is now subject to new federal tax withholding rules, which adds to the challenge of recovering IRA assets which remain after the withholding is paid to the IRS. I don’t know why age 72 would matter for a Roth IRA since there are no RMDs required by Roth owners.