spousal inherited 401k to inherited ira
When a spouse inherits her husband’s 401k (either through death or qdro), they should have the ability to roll it into an Inherited Traditional IRA correct? The spouse would want to do that to take distributions penalty free until they turn 59.5, at which time they can assume the ira.
Permalink Submitted by Alan Spross on Wed, 2008-09-17 03:05
That’s right.
The rollover to an inherited IRA was established by PLR 2004 50057. However, this provision was never included in the tax code even though the PPA authorized NON spouse rollovers to inherited IRAs. The spousal rollover provisions should be included in the Technical Corrections Act that is still pending in Congress for the PPA, but I do not believe it was included in rough drafts. Therefore, some IRA custodians may not be receptive to setting up an inherited IRA for a spouse, but eventually you will probably find one.