IRA owner with severe dementia – spousal rollover possible?
I have a CPA telling me that if an IRA owner has “severe dementia,” then a spousal rollover can be made into the name of the spouse, even while the IRA owner is still alive. Not guardianship, not POA, but an actual change of ownership of the IRA from John Doe to Mary Doe.
I have never heard of anything like this, and the CPA has yet to provide any authority to back up his assertion.
Setting aside the issues of capacity, agency, powers of attorney, how “severe dementia” is defined, etc., I just want to make sure I am not missing anything regarding the core idea. Is there *anything* anywhere that supports this idea of an inter vivos change of ownership of your IRA to your spouse in cases of severe cognitive impairment, like dementia?
Please and thank you!
Permalink Submitted by Alan - IRA critic on Fri, 2021-07-16 14:18
The only possibility I can think of is described in the following Investopedia quote:
“Special Considerations -In some cases, a QDRO might be put in place for a relation other than a former spouse, but dependents might also qualify to receive the ordered benefits. In such instances, the alternate payee is a minor or is determined to be legally incompetent. The order can require the benefit plan to make payment to an individual with legal responsibility for that payee. This can include a guardian as well as a trustee who serves as the agent of the individual. The plan administrator who oversees the retirement benefits subject to the order will determine if a QDRO is a qualified domestic relations order. In these circumstances, plan administrators are then responsible for ensuring their duties are fulfilled on behalf of plan participants and beneficiaries.”