Inherited Spousal IRA ??
Situation:
Client’s spouse passes away January this year. She would not be 70 1/2 until this year. Thus, no RMDs occurred on her account. Her account is inside of an EIA with an insurance company.
Upon death of the spouse, client requested a check as beneficiary of the EIA. His intent was to place it with another custodian.
The check has been received by the client but has not been deposited or cashed.
What options are available to maintain this money as inherited IRA money?
Permalink Submitted by Alan Spross on Tue, 2008-03-04 22:38
Bill,
No options unless he can convince the insurer to void the checks and then change the EIA to an inherited IRA OR directly transfer the death benefit to an inherited IRA set up by the client’s new custodian. This may be a very hard sell, so perhaps he might consider offering to pay any extra processing charges if he does not want to complete the rollover.
Once he cashes the current check, his only option is to roll over the amount into his own IRA (spousal rollover), but of course it will not carry inherited IRA status. Why does he want to maintain inherited status, is he under 59.5 and may need distributions prior to 59.5?
If he by chance is succesful and can maintain inherited IRA status, he then must start RMDs in 2009 because of the age of the deceased spouse.