IRA Spousal Waiver
Can a spouse who has an IRA remove the other spouse as primary beny if he has Alzheimer’s by having POA sign the spousal waiver and name someone other than spouse? The state is NY.
- If the POA includes the power to change beneficiaries and the IRA custodian accepts the beneficiary change, it should apply. However, despite the IRA not being part of the probate estate, apparently the IRA can be included in the spouse’s elective share per NYS statutes if necessary.
- https://www.aminovlaw.com/disinheriting-a-spouse-and-the-ny-spousal-right-of-election/
Since New York is a common law property state a spousal waiver should not be required for the wife to change her IRA beneficiary. This assumes that the IRA is a normal traditional or Roth IRA and not a SEP, SIMPLE IRA, or 401(k) rollover IRA. A question of community property, and hence the need for a waiver, might arise if the couple previously lived in a community property state during the time that the IRA was funded. If not, or if the couple always resided in New York or other common law property states, there would be no need for a spousal waiver. However, some IRA custodians act out of caution and may require the waiver anyway. If this is the case, the wife should try to convince them, or is always free to transfer the IRA to a new custodian who does not require the waiver for NY residents. (Note that a 401(k) does require a spousal waiver for beneficiary changes in all states due to ERISA.)
I thought all states required a spousal waiver to name someone other than the spouse as primary beneficiary. I live in IL but thought it was a federal law,
It is a federal ERISA requirement for ERISA plans, but not for IRA accounts. The waiver is usually required by IRA custodians in Community Property states, but not in common law states.
many custodians ask for a spousal waiver regardless of whether the IRA owner and their spouse live in a community property state for one of two reasons 1) they don’t know any better and it’s easier to just ask for it from everyone 2) they know the difference but like having an extra layer of protection from being drawn into an ugly court battle.
Permalink Submitted by Alan - IRA critic on Sat, 2018-01-20 22:16
Who has Alzheimer’s, the IRA owner or the beneficiary? And who is requiring that the beneficiary sign a waiver?
Permalink Submitted by Shawn Danziger on Mon, 2018-01-22 14:59
the client is the wife. Her IRA beny is the husband who has altzheimers. She wants to know if the POA can sign the waiver so she can name someone else.