Last week in La Jolla, California, the Ed Slott team hosted another incredibly successful 2-day advisor training program. Nearly 200 financial professionals from across the country chose to join us for some intense IRA and retirement plan education. Topics included all things Roth, net unrealized appreciation, naming trusts as IRA beneficiaries, new SECURE 2.0 updates, QCDs, 10% penalty exception rules, creditor/bankruptcy protection rules, and the list goes on.
Ever since the SECURE Act created a 10-year payout rule for most IRA beneficiaries, that topic has garnered the bulk of conversation. This is understandable. Not only was the 10-year rule a brand-new payout structure, but questions swirling around application of the 10-year window remain unsettled.
Question:I have two questions regarding the 15-year requirement that applies to new rules allowing rollovers from 529 plans to Roth IRAs. If you change beneficiaries, will it reset the 15-year clock? Secondly, if you roll your 529 plan into another 529 plan (say Virginia plan to Nevada plan which also involves a change in custodians), does this reset the 15-year clock?
Question:I have two questions regarding the 15-year requirement that applies to new rules allowing rollovers from 529 plans to Roth IRAs. If you change beneficiaries, will it reset the 15-year clock? Secondly, if you roll your 529 plan into another 529 plan (say Virginia plan to Nevada plan which also involves a change in custodians), does this reset the 15-year clock?
Question:Dear Mr. Slott,I made $40,000 additional non-deductible (after taxes) contributions to my IRA many years ago. I have filed IRS Form 8606 every year informing the IRS of the contributions. I would like to withdraw the $40,000 this year so that when I have to take my RMDs next year, the reporting to the IRS will be simpler.
Many IRA assets will ultimately go to nonspouse beneficiaries. When these beneficiaries inherit the funds, special rules kick in. Inherited IRAs are not like your own personal IRA account. Here are seven rules for inherited IRAs that may surprise you if you are a nonspouse beneficiary:
The lunacy of IRA beneficiary payout rules continues to boggle the mind. As I guide advisors through the options available to their clients, various nuances present one unique scenario after another. Did the original IRA owner pass away before or after the establishment of the SECURE Act? How old was the person when they died? Who was the beneficiary? Is this a successor beneficiary situation? Ultimately, by following the individual fact patterns, definitive answers materialize.
Are you thinking of naming a child or grandchild as your IRA beneficiary? With the start of the SECURE Act in January 2020, the rules for inherited IRAs were upended. Prior to the enactment of the SECURE Act, naming a minor as a beneficiary was a good way to take advantage of the stretch IRA. A grandparent could name a young grandchild as their IRA beneficiary and distributions could be paid from the inherited IRA for decades over the long life expectancy of the beneficiary.
Question:I believe we are all waiting for the IRS to issue rules related to distribution requirements (or not) for beneficiaries who are subject to the 10-year rule under the SECURE Act. Where is the clarification for 2023? In my situation, my children are beneficiaries who inherited an IRA from Grandma, who passed away in 2022.
When an IRA owner dies, we look to the beneficiary form to determine who should receive the IRA funds. After death, there is a transition process as assets are moved into an inherited IRA for the beneficiary. But what if the beneficiary dies after the death of the original IRA owner, but prior to claiming the account?
