Rollover of Disclaimed Traditional IRA & Roth IRA Assets
An individual account owner dies w/ assets in both a Roth IRA and a Rollover IRA. Due to oversight, the original beneficiary elections were never changed from the account owner’s parent to the spouse. If the parent disclaims benefits and the respective accounts pass to the surviving spouse via probate, can the assets then be rolled into Roth IRA and IRA Rollover accounts to preserve the tax benefits for the surviving spouse?
Permalink Submitted by Alan - IRA critic on Tue, 2022-08-23 15:16
There have been several PLRs allowing a spousal rollover, and the process is easier if the spouse is the sole beneficiary and executor of the estate. That said, some IRA custodians will cooperate with assignment and others will not. First, a qualified disclaimer must be filed by the deadline, and then the executor must assign the IRA out of the estate to an inherited IRA for the spouse, who can then elect to assume ownership. The IRA beneficiary clause should also be checked to determine the default beneficiary. It might be the spouse and not the estate and that would eliminate the need for assignment.
Permalink Submitted by Bruce Steiner on Sat, 2022-08-27 15:36
See my articles on this subject in the October 1997 issue of Estate Planning, https://www.kkwc.com/wp-content/uploads/2015/04/AR20050125164755.pdf, and the June 2015 issue of Trusts & Estates, https://www.kkwc.com/wp-content/uploads/2015/08/IRA-Rollovers-Making-this-option-possible.pdf .