Rollover by non-spouse beneficiary?

[joel]

May a non-spouse beneficiary of a 403b, roll the distribution over to another 403b and or an IRA? Or is rollover treatment not permitted.

[Guest dynalow]

non-spouse bennies can not rollover 403b, 401k or classic IRAs because they are subject to minimum distributions requirements from those acounts. most finincial institution offer a saving plan that will tax differ everything exept the minimum recuired amount(based on life expectancy)

[joel]

Dynalow,

Please clarify your last sentence.

Thanks,

JLF

[Guest dynalow]

the original owner of a 401k 0r 403b are generally required to begin some type of disbursement from deffered plans at age 70.5. if the original owner passes and the benneficiary is a spouse he or she is not required to take a distribution until the later of deceaced owner or survivor turns 70.5(if the spouse rolls over the plan to an ira min dist is requires when they the survivor turns 70.5). A NON-SPOUSE survivor is required to begin distribution from such plans no later than april first of the year following the death of the original owner. Basically the IRS allows spouses to rollover and differ the taxes until retirement age, non-spouses have to begine distribution almost right away, the minimum distributions requirements should be based on the survivors life expectancy accourding to irs tables.

Most companies offer something somtimes called survivor savings plans(fidelity, tiaa-cref) which will basically hold all the funds in a tax differed account and only pay out the bare minimum required by the IRS, those payments made are taxable to you as ordinary income. IE: if the account was worth $100,000 and your life expectancy is 20 years you have to take a taxable payment of $5000, the remaining amount goes tax sheltered, next year your required to take 1/19th and so on, these minimum dist payment are not eligible to be rolled either. If you receive a lump sum payment, it is not allowed to be rolled to an ira and would be taxable to you as income in the year in which you receive it. Basically the government wants to get paid since the origally owner differed the taxes on the contributions.

If the survivor missed the april first deadline to take the first taxable distribution they have to take all of it out within 5 years of the death of the original owner. I hope this help

[joel]

John Doe inherits his sister Mary Doe's IRA. How does the new account registration read?