Non-spouse Rollover – Alternate Payee
Do beneficiaries of an alternate payee qualify for a non-spouse rollover? Scenario: Husband is employee, has 401 (a) retirement plan. He divorces and wife through a QDRO receives half of the retirement account. She names beneficiaries (sisiters) for her “alternate payee” account. She dies. Can her beneficairies roll over their benefit as a non-spouse rollover. 2nd scenario – if she named children and these children were also named by the husband as benfciaries of his account, would they qualify.
Permalink Submitted by Alan Spross on Thu, 2008-05-22 01:26
They should qualify IF the plan would allow the employee’s beneficiaries to do the transfer, which is currently optional under the latest IRS interpretation. Whatever is allowed to the employee would also apply to the partitioned interest of the alternate payee. Who the non spouse beneficiaries are of either party should not be material.
Perhaps the IRS will clarify this issue fairly soon.
Permalink Submitted by Lynn Jarzombeck on Thu, 2008-05-22 13:27
[quote=”[email protected]“]They should qualify IF the plan would allow the employee’s beneficiaries to do the transfer, which is currently optional under the latest IRS interpretation. Whatever is allowed to the employee would also apply to the partitioned interest of the alternate payee. Who the non spouse beneficiaries are of either party should not be material.
Perhaps the IRS will clarify this issue fairly soon.[/quote]
Thank you for replying! I have searched with no available to find something in print that addresses this issue. I appreciate your response.