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IRA Beneficiary

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dcca123

Junior Member
What is the name of your state? WV
Looking for quick advise -Meeting with IRA rep. later today :confused:

My wife was notified that she was the beneficiary of one of her late father's IRAs. The financial institution that holds the IRA is claiming that they must open a new IRA in her name to transfer the funds to her. She can then choose to withdraw the money if she wants. Is this true or are they just trying to drum up another commisioned sale of an IRA.

Thanks
 


efflandt

Senior Member
The account must remain in the name of the deceased. See http://www.irs.gov/publications/p590/ch01.html#d0e2986

Inherited from someone other than spouse. If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that you cannot make any contributions to the IRA. It also means you cannot roll over any amounts into or out of the inherited IRA. However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary.

Like the original owner, you generally will not owe tax on the assets in the IRA until you receive distributions from it. You must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries.
 

Snipes5

Senior Member
That has nothing to do with the OP's question.

If the OP does in fact cash out the IRA all at once...(this is definitely an option under the "rules" you mention), the OP can then open an IRA using some of the money from the original.

However, it is illegal for the financial institution to REQUIRE the OP to do something like this, and the IRA cannot be transferred into the name of anyone who is not a spouse. Hence, my response.

Snipes
 

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