Roth IRA: Naming Foreign Citizen as Beneficiary

[steve_w]

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

Hi, I'm in the process of setting up a Roth IRA and would like to name my mother as a beneficiary. One of the fields in the application form requires the social security number or the Taxpayer ID number of the beneficiary. As my mother is a foreign (Non-U.S.) citizen residing abroad, she has neither. When I pointed this out to the customer rep. helping me with the application form, she said it was a required field otherwise my mother cannot be named as a beneficiary. She wasn’t sure whether it was possible for foreigners to be beneficiaries of Roth IRAs.

My questions are as follows:

1) Is the social security number or the Taxpayer id number really required to name a person as a beneficiary of a Roth IRA?
2) If it is, does that mean that foreign citizens cannot be named as beneficiaries of Roth IRAs?

Any feedback on the above will be much appreciated.

Thanks

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

 

[Dandy Don]

It is very easy to obtain a taxpayer ID number (you can probably find a form for such at your local library or perhaps online). You truly need to discuss this with a certified estate planner or an expert on ROTH IRA's to be sure that the intentions you want to carry out can officially be accomplished. It will probably be okay for you to name her as beneficiary after you have gotten a taxpayer ID, but you may want to make alternate arrangements in case that is not possible.

 

[trust_id_09]

Foreign Beneficiary

It is very easy to obtain a taxpayer ID number (you can probably find a form for such at your local library or perhaps online). You truly need to discuss this with a certified estate planner or an expert on ROTH IRA's to be sure that the intentions you want to carry out can officially be accomplished. It will probably be okay for you to name her as beneficiary after you have gotten a taxpayer ID, but you may want to make alternate arrangements in case that is not possible.

You really need to enquire about the tax laws in that country as far as enheritance is concern. Not every country issues a social security number to its citizen. Just, as Don suggested, provide beneficiary's name and a valid address. In must thrid world countries they don't even care, let alone question where its citizen's $$ is coming from. Well, unless it is millions...

 

[steve_w]

Thanks for the feedback, Dandy and Trust.

 

[TrustUser]

in case that doesnt work, could you set up a trust with its own tax id number, and your mom as beneficiary ?

 

[steve_w]

Thanks for the suggestion TrustUser. As Dandy suggested in this thread, it does appear that I need to discuss the various options with an estate planner

 

[boscogerald]

I'm a financial professional and am just encountering this problem with a client. I never realized it would be an issue but apparently it is. The client is 92 and I'm working with the daughter who has a POA. We would like to establish her and her brother as beneficiaries on an investment account but he is a Canadian citizen and resides in Canada. As of now (and this is why I'm doing some research to see if there's a way around it), he cannot be named as bene on the account. One option I've discussed so far is to establish a trust as mentioned above. The other is to just leave the benes off and let the client's will dictate how the assets should be dispersed. That means the money will have to go through probate, but at least the rightful heirs will get their money.

The issue I've been told by my broker/dealer is with IRS reporting when the funds are dispersed. If you don't live in the US nor do you have a US ss#, there is nobody the IRS can enforce to pay taxes, if any. If you're able to sneak the paperwork through, then you run the risk of the funds being frozen and held up...so you may have established the bene but you didn't fix the problem. You only created a headache when you expect to receive the money.

If anyone has any other ideas or feedback, please post!