Heart Act Beneficiary

Submitted by Ed Coleman on Fri, 2023-07-14 21:47

The Heart Act is clear as mud. I am working with the mother of a deceased member of the military. She is the beneficiary of his life insurance proceeds. Although married the deceased had not changed his beneficiary designation to his spouse. Am I correct that mom can roll over these proceeds to a Roth IRA? Where can I find supporting documentation?



Submitted by Alan - IRA critic on Fri, 2023-07-14 23:04

  • Following is Sec 408A(e)(2):
  • (2)Military death gratuity(A)In generalThe term “qualified rollover contribution” includes a contribution to a Roth IRA maintained for the benefit of an individual made before the end of the 1-year period beginning on the date on which such individual receives an amount under section 1477 of title 10, United States Code, or section 1967 of title 38 of such Code, with respect to a person, to the extent that such contribution does not exceed—(i)the sum of the amounts received during such period by such individual under such sections with respect to such person, reduced by(ii)the amounts so received which were contributed to a Coverdell education savings account under section 530(d)(9).(B)Annual limit on number of rollovers not to applySection 408(d)(3)(B) shall not apply with respect to amounts treated as a rollover by subparagraph (A).(C)Application of section 72For purposes of applying section 72 in the case of a distribution which is not a qualified distribution, the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.

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