IRA rollover for non-US resident

[pippogiulia]

What is the name of your state (only U.S. law)?

My mother lived and worked in the US for 40 years. While working she contributed to a 401k which she rolled over into an IRA account when she retired. (about 25 years ago). She never became a US citizen while living here but had a green card. Shortly after retiring she returned to Italy, the country of her citizenship. She retained her IRA rollover account with Morgan Stanley and has been making the annual minimum withdrawals.
She received notification from Morgan Stanley today that they will no longer be servicing accounts from residents of Italy and have told her she needs to withdrawal her money before they close her account. If she withdrawals the total sum of her account 55K - 60K she will be taxed which defeats the purpose of opening such an account in the first place. Do you have any suggestions on how to proceed?

 

[Zigner]

What is the name of your state (only U.S. law)?

My mother lived and worked in the US for 40 years. While working she contributed to a 401k which she rolled over into an IRA account when she retired. (about 25 years ago). She never became a US citizen while living here but had a green card. Shortly after retiring she returned to Italy, the country of her citizenship. She retained her IRA rollover account with Morgan Stanley and has been making the annual minimum withdrawals.
She received notification from Morgan Stanley today that they will no longer be servicing accounts from residents of Italy and have told her she needs to withdrawal her money before they close her account. If she withdrawals the total sum of her account 55K - 60K she will be taxed which defeats the purpose of opening such an account in the first place. Do you have any suggestions on how to proceed?

What did Morgan Stanley suggest when they were asked about this? (Your mom can't be the only one in this situation)

 

[pippogiulia]

My mothers stock broker informed me of the change in policy. He offered no advice other than to sell her securities and close her account. He gave me the phone number of the compliance officer who notified him that this would be taking place and I called her to discuss my mother's options. She also offered me no advice but said to wait until we received formal notification that the account would be closed in 90 days.

 

[tranquility]

Did they say why they were changing the policy? If it is just a business decision, roll it over to another trustee. If it is because of monetary policy in Italy to stem the problems from the Euro crisis, you may not be able to find any trustee able to hold the money.

Find out why.

 

[pippogiulia]

I called Charles Schwab and they told me I could rollover my mothers account to their institution.
The compliance officer at Morgan Stanley explained that there are special certificates and licenses that they need to have for accounts from different countries and that they felt that it was not in their interest to hold these accounts for Italian citizens.