Setting up decedent IRA from a qualified plan?

[Guest dory]

Is it possible for pension plan to distribute/rollover monies directly into an IRA to be set up in the name of the deceased participant?

[david rigby]

I would ask first if the plan permits payment to a deceased. Most plans define beneficiary.

[Guest dory]

Understood - I am just wondering if it is even possible for a plan to allow for this type of distribution option at all - I am familiar with the practice of being able to transfer amongst IRA's between financial institutions in the name of a decedent but this would be different , coming out of a qualified plan. The ultimate objective would be to get the money into an IRA where the deceased's sister could be named as beneficiary (btw - she is currently named as the primary bene under the plan itself) and be able to stretch out distributions over her remaining life expectancy - I know that it's possible (probably not practical) to do a stretch directly from a qualified plan, but she would like to be able to have the plan roll directly into a "decedent ira" on her behalf.

[mbozek]

IRAs can only be established by a participant or the surviving spouse of a participant. A personal representative of a deceased participant cannot open an IRA in the participant's name. A beneficiary of a deceased participant cannot establish an IRA in his or her own name to accept the proceeds of an IRA owned by a deceased participant.

[BPickerCPA]

Dory,

The answer to your original question is yes. But only the surviving spouse who is the sole beneficiary would be able to set up such an IRA. Since in your case the sister is the beneficiary, you are out of luck.

[Guest dory]

Thanks, all.