QDOT IRA

Submitted by Mandy Magee on Wed, 2023-12-06 20:23

We have a client that is a non-US Citizen. His wife passed more than a year ago unexpectedly. He has had a QDOT written up to add her IRA and Roth assets to. How should the assets pass to the QDOT? Should they go through an Inherited IRA/Roth in his name and then out to an Inherited IRA/Roth owned by the QDOT? This is how I would assume it should happen, however I’m running into the issue that the application for the QDOT Inherited IRA requires the naming the original account owner, and is assuming that the Trust was named as a beneficiary on that person’s IRA.



Submitted by David Mertz on Wed, 2023-12-06 22:13

To get into an inherited IRA for the benefit of a trust, the trust would have to have been named as the beneficiary of the wife’s IRA.  If the client was the designated beneficiary, the only options are to maintain an inherited IRA for the benefit of the client or for the client to assume ownership of the IRA.  The client cannot assign beneficial ownership.

Submitted by Bruce Steiner on Tue, 2023-12-26 01:46

  • If he’s the named beneficiary, he can’t transfer the IRA.  However, under the regulations, he can agree to contribute the principal portion of the IRA distributions to the QDOT, and the QDOT can reimburse him for the income tax on it.  If he does that, it will qualify for the marital deduction.
  • Since this is tricky, he should work with competent trusts and estates counsel on this.
  • Bruce Steiner

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