Can an IRA beneficiary roll the IRA over into another account and designate another beneficiary?

By Denise Appleby AAA
A:

It depends on the provision of the IRA plan document. Some (though very few) do not allow the designation of successor beneficiaries. The good news is that most do. If the beneficiary designates a successor (second generation) beneficiary, the successor beneficiary must continue distributions based on the first-generation beneficiary's life expectancy. An exception applies to a spouse beneficiary who elects to treat the IRA as his or her own; this spouse beneficiary would use the rules that apply to the IRA "owner" - not the beneficiary.

By the way, when you communicate with your financial institution regarding the matter, you may want to use the term transfer instead of rollover, just to make sure that the transaction is done properly. As you may know, once a beneficiary takes a distribution of inherited retirement (including IRA) assets, that amount cannot be rolled over unless the beneficiary is the spouse of the deceased retirement account owner. With a transfer, the assets are delivered directly to the financial institution for credit to the inherited IRA. The beneficiary must not take possession of the assets if he or she wants to keep them in an IRA.

To read more, check out Moving Plan Assets: How To Avoid Mistakes.


This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. Can I purchase mutual funds for my IRA?

    Learn how to invest your IRA assets in mutual funds. Discover a few of the different types of mutual funds available for ...
  2. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ...
  3. Who is eligible for a Teacher Retirement?

    Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ...
  4. What's the difference between a financial advisor and a financial planner?

    Seeking professional advice from a financial advisor may involve asking for financial help from a certified financial planner, ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Gold IRA

    Definition of Gold IRA
  3. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  4. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  5. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  6. MyRA

    A new tax-advantaged retirement account that President Barack ...

You May Also Like

Related Articles
  1. You need to be patient, diligent and perseverant to be successful at investing, but more importantly, you need to start early.
    Investing Basics

    Why You Should Start Investing Early? ...

  2. Many of us fantasize about winning a big lottery jackpot. Let’s say that actually happened? What would you do with the money? How would you manage it?
    Professionals

    Tips For Managing A Cash Windfall

  3. Retirement

    Planning Ahead for 2015's Tax Law Changes

  4. Even though inflation currently seems tame, it's still the worst enemy of retirees. Here are some tips to reduce its impact.
    Professionals

    Tips For Managing Inflation In Retirement

  5. Retirement

    5 Crucial Tips For Your Retirement Income ...

Trading Center