Denise Appleby- Author, Speaker on IRAs & Employer Retirement Plans; Consultant, and Trainer of Choice for Financial and Tax Professionals
Portability Options for Inherited Assets from Employer Plans, Traditional IRAs and Roth IRAs |
||||||
To Traditional IRA |
To Roth IRA |
|||||
Beneficiary |
Own |
Inherited |
Beneficiary |
Own |
Inherited |
|
Employer Plan |
Spouse |
Yes |
Yes |
Spouse |
Yes |
Yes |
Nonspouse |
No |
Yes |
Nonspouse |
No |
Yes |
|
Qualified trust |
No |
Yes |
Qualified trust |
No |
Yes |
|
Nonperson |
No |
No |
Nonperson |
No |
No |
|
Roth 401(k) and Roth 403(b)/ 457(b) Gov’t |
Spouse |
No |
No |
Spouse |
Yes |
Yes |
Nonspouse |
No |
No |
Nonspouse |
No |
Yes |
|
Qualified trust |
No |
No |
Qualified trust |
No |
Yes |
|
Nonperson |
No |
No |
Nonperson |
No |
No |
|
Traditional IRA |
Spouse |
Yes |
Yes |
Spouse |
Yes[1] |
No |
Nonspouse |
No |
Yes |
Nonspouse |
No |
No |
|
Qualified trust |
No |
Yes |
Qualified trust |
No |
No |
|
Nonperson |
No |
Yes |
Nonperson |
No |
No |
|
Roth IRA |
Spouse |
No |
No |
Spouse |
Yes |
Yes[2] |
Nonspouse |
No |
No |
Nonspouse |
No |
Yes |
|
Qualified trust |
No |
No |
Qualified trust |
No |
Yes |
|
Nonperson |
No |
No |
Nonperson |
No |
Yes |
|
PAGE 2 |
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To Employer Plan Account |
To Roth 401(k) & Roth 403(b)/457(b) Gov’t |
|||||
Beneficiary |
Own |
Inherited |
Beneficiary |
Own |
Inherited |
|
Employer Plan |
Spouse |
Yes[3] |
Yes [4] |
Spouse |
Yes 1 |
Yes 2, [5] |
Nonspouse |
No |
Yes 2 |
Nonspouse |
No |
No |
|
Qualified trust |
No |
Yes 2 |
Qualified trust |
No |
No |
|
Nonperson |
No |
Yes 2 |
Nonperson |
No |
No |
|
Roth 401(k) and Roth 403(b)/ 457(b) Gov’t |
Spouse |
No |
No |
Spouse |
Yes 1 |
Yes |
Nonspouse |
No |
No |
Nonspouse |
No |
Yes |
|
Qualified trust |
No |
No |
Qualified trust |
No |
Yes |
|
Nonperson |
No |
No |
Nonperson |
No |
Yes |
|
Traditional IRA |
Spouse |
Yes |
No |
Spouse |
No |
No |
Nonspouse |
No |
No |
Nonspouse |
No |
No |
|
Qualified trust |
No |
No |
Qualified trust |
No |
No |
|
Nonperson |
No |
No |
Nonperson |
No |
No |
|
Roth IRA |
Spouse |
No |
No |
Spouse |
No |
No |
Nonspouse |
No |
No |
Nonspouse |
No |
No |
|
Qualified trust |
No |
No |
Qualified trust |
No |
No |
|
Nonperson |
No |
No |
Nonperson |
No |
No |
|
Notes:
[1] Treated as a Roth conversion (may be taxable). Spouse must first elect to treat the inherited traditional IRA as his or her own IRA( see Q&A for this is done)
[2] Verify that IRA agreement provides this option, and if not, the only option available to surviving spouse is to treat the Roth IRA as his or her own.
[3] Surviving spouse must be a participant in the receiving plan.
[4] Account must remain within the same employer’s plan that held the deceased participant’s assets.
[5] Plan must allow for an in-plan conversion.