Trust (as IRA Beneficiary)
T-IRA owner, > 70.5 died this year (2014)
Estate named sole primary beneficiary on IRA beneficiary form
surviving spouse is sole beneficiary of the estate
My understanding the surviving spouse has the following options – due to the estate being named beneficiary
“stretch” using the life expectancy of the deceased – assuming he lived
5-year payout
cash out
Question(s)
The surviving is requesting to rollover over the IRA to her own. Is this permitted? I thought I’ve seen cases where the IRS has allowed a spousal rollover when the estate has been named the beneficiary. Would a PLR be needed here?
Also the RMD was not taken prior to death. Who is ultimately responsible for the 2014 RMD – estate? or surviving spouse (as beneficiary of the estate)?
Anything else that I am overlooking?
Thank you in advance
Brian
Permalink Submitted by Alan - IRA critic on Wed, 2014-05-28 23:22
The uncompleted year of death RMD is the responsiblity of the beneficiary of the IRA. If the surviving spouse is the sole beneficiary under the will and executor of the estate, they can usually roll the inherited IRA over to their own IRA. There have been enough PLRs in the past that allow this treatment such that a new PLR is probably not needed. See the attached: http://www.ataxplan.com/bulletinBoard/ira_providers.cfm. Note that this also applies to sole spousal beneficiaries of a trust, but a trust can have more variables than an estate.
Permalink Submitted by Bruce Steiner on Wed, 2014-05-28 23:59
It’s often possible to get the IRA to the spouse so he/she can do a rollover. For more on this, see my article on this subject in the October 1997 issue of Estate Planning: http://www.kkwc.com/docs/AR20050125164755.pdf. We’ve obtained private letter rulings on this, and in some cases were able to accomplish this without a ruling.