60-day Rollover Waiver valid upon death of owner?

Submitted by Zultan Bermudez on Wed, 2016-12-14 10:45

Scenario: IRA owner cashes out his pension upon taking retirement. He was diagnosed with terminal cancer and was in panic mode to aggregate assets. The wife spoke to a financial advisor to discuss options but due to the situation and being in and out of the hospital, the IRA owner never met with the advisor and the rollover paperwork was not completed within the requisite 60 day period. Under normal circumstances, the client can self-certify for the waiver.

The client, however, passed away before completing the paperwork. What are his wife’s options?

Can she self-certify with the waiver and roll the money over to her own IRA? I cannot find any literature on this and the fund companies I spoke to has no definitive answer. In this scenario, the 1099-r will be under the husband’s SSN and the 5498 will be under the wife’s. I think this will be an issue no?

How about the estate establishing an IRA for the deceased to complete the rollover? From what I read, the IRS does not allow the estate to make a current year contribution to the deceased’s IRA but since this is just a rollover, will it be acceptable? Is it even possible?

Or are they just out of luck? Any advise would be appreciated. Thanks.



Submitted by David Mertz on Wed, 2016-12-14 21:57

  • I don’t know that self-certification is possible since the taxpayer who is required to make the self-certification is deceased.  I don’t see any indication in IRS Rev. Proc 2016-47 that the estate’s executor can make a self-certification on behalf of the deceased.  I think a request for a PLR would have to be made.
  • Under similar circumstances, the IRS has issued PLRs granting a waiver of the 60-day rollover requirement for the estate executor to complete the rollover to an IRA in the name of the deceased.  Such IRA would not have a designated beneficiary.  PLR 201334046 is an example.

Submitted by Alan - IRA critic on Wed, 2016-12-14 23:22

This sounds like the type of exception that the IRS has been approving in several PLRs and is also consistent with the self certification process. It is not clear whether the IRS omitted this situation by accident or for a specific reason, but this specific situation is not included in the self certification process. Therefore, I agree that a PLR would be required. Even though the taxpayer might be construed to be included as a decedent in the taxpayer’s immediate family as justification FOR a rollover, the self certification process does not indicate that anyone other than the taxpayer himself could do the rollover.

Submitted by Bruce Steiner on Wed, 2016-12-14 23:38

  • I obtained PLR 201514020 in this situation.  That permitted the money to be rolled over into an IRA in the decedent’s name.  You would probably have to show that the decedent intended to complete the rollover but was prevented from doing so by reason ofhis death.
  • If the estate goes to the wife, the wife should then be able to roll it over into her own IRA.
  • Bruce Steiner

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