Non Spouse Inherited IRA
Original owner had IRA money in an annuity, and died. Beneficiary is a non spouse. Beneficiary does NOT have any IRA’s set up. Can beneficiary go to a brokerage and set up an inherited IRA a/c and then have money transferred to said a/c? Should a/c be set up, ” John Smith deceased, IRA for the benefit of Jane Jones, beneficiary”….even BEFORE money is rolled over from annuity? Or should titling of a/c be different initially, and then changed after the rollover?
Permalink Submitted by Alan - IRA critic on Tue, 2013-04-16 20:34
Yes, the new IRA account should be titled in the beneficiary format required by the custodian when it is opened. Both names must be included, but do not have to be in a particular order. A direct transfer of the annuity proceeds should be requested, being very careful not to trigger a distribution, since a distribution cannot be rolled over. If the insuror makes a check out to the new custodian FBO of Jane Jones inherited IRA and send it to Jane, who then delivers the check to the new custodian, that will be considered a non reportable transfer and NOT a distribution.