Previous year IRA/SEP if client passed away this year?
is it possible to open a previous year IRA or SEP account if a client passed away in the current year? since they still have to file taxes, it seems like they should be eligible for the deduction, but if the client can’t sign and a POA would no longer be in effect, logistically there are obvious issues in opening the account.
would appreciate any thoughts on this!
Permalink Submitted by Alan - IRA critic on Wed, 2014-02-26 22:06
A traditional or Roth IRA contribution cannot be made for a decedent. However, it appears that a SEP IRA is different because the rules require contributions to be made for all employees including deceased employees. Separately, for SEP purposes Sec 401(c) states that a self employed individual is treated as an employee in all respects. So if the SE individual passes, a contribution can be made on behalf of the decedent. But expect some issues in getting the SEP custodian to agree to accept the contribution. A surviving spouse beneficiary/executor may have an easier time handling this than a different executor.