Non spouse beneficiary of 401k and IRA titling
I have a client that is the beneficiary of his life partners 401k, IRA and Roth IRA. The account I set up is titled as Jane Smith, deceased IRA, FBO Bob Jones Beneficiary. The 401k custodian sent a check that reads: XYZ Custodian, FBO Bob Jones IRA. The check has the correct new account number which is set up as an inherited IRA and the accompanying paperwork from the 401k custodian does say this is a non taxable rollover. Any issues with this? Second question. Bob Jones’ life partner had an IRA at Edward Jones. He did go in and have it changed to an inherited IRA, but the states say Edward Jones Custodian, FBO Jane Smith IRA, C/O Bob Jones. The broker at Edward Jones says that it is set up as an inherited IRA. Bob Jones was also able to do paperwork with Edward Jones to select primary beneficiaries. I don’t think this is correct. Please advise. Thanks
Permalink Submitted by Alan - IRA critic on Wed, 2017-08-23 21:48
No issues with the first part. But EJ has a very odd way of titling inherited IRAs, makes Bob Jones appear to be more of a conservator than a beneficiary. I doubt this would result in any IRS problems however it may hinder the transfer to a new inherited IRA custodian. Bob should at least seek some confirmation that this wording is applied to all of the firm’s inherited IRA accounts. I presume that the TIN is Bob’s SSN.