guestdelta

Because there was an identifiable gap between the deaths, I do not believe Florida's law would provide any direction.

As the title states, the original IRA depositor (a Florida resident) passed away leaving the assets to his spouse. Hours after, the spouse passes away prior to the assets moving to her IRA. JP Morgan is saying the only option is a distribution to the estate resulting in some hefty tax implications given the size of the IRAs. Has anyone dealt with a situation like this? I am sure there are some PLRs out there that help with the tax side of things, but ultimately this is a contractural matter between the estate and the custodian.

I am working with a client regarding an inheritance from a 401K plan that has some unusual moving parts. The client is the personal representative of his uncle's estate. The facts of the situation are as follows: Uncle dies in 2021 and has 401k assets at their employer with no stated beneficiary Wife of uncle (aunt) does nothing with the assets Aunt dies in 2024 and personal representative discovers Uncle's 401k assets at employer. Uncle has a will that specifies that retirement assets upon his death will end up in a trust. Trust has named, identifiable beneficiaries. Probate proceedings started on the Uncle because they were never done in 2021 with the court ordering the 401k assets to be paid to the trust. The PR wishes to go down the road of seeing if the situation would qualify for see-through treatment rather than the distribution being taxable to the trust and subsequent beneficiaries. Since the 401k company was not notified by October of the year following the Uncle's death, I believe this automatically disqualifies the assets (amongst other issues).

Financial Planning Consultant for said client. Arguably more of an idea generator with this situation vs. problem solver.

We are advising a client (along with bringing in outside experts) regarding an overfunding of a sole proprietor DB plan. Long story short, the actuarial was unable to accurately anticipate the aggressive nature of our client's investing and currently has a nearly $1mm overfunding situation. The actuarial has suggested that the sole proprietor take "catch up" distributions to eat up the overfunding, however the client has reached out to us to brainstorm some additional options due to income tax impacts. To complicate matters, the business is wrapping up operations within the next year or so and may exist in a "slowed down" state for a number of years beyond. I realize the option of a Qualified Replacement Plan (QRP) exists, but I believe that the overfunding amount will remain suspended until used for contributions (which may be impacted because of the lower amount of income). The issue with the suspension is that in the case of untimely death of the sole proprietor, my understanding is that it automatically reverts. Beyond that, I have read that using the money for health benefits is possible, but the topic is less popular and murkier based on my limited research. Any thoughts or suggestions on avenues to explore? My intent is to have a thorough discussion with the client and "spit ball" ideas in coordination with the actuarial. Thanks to all.