inherited IRA in community property state requires spousal consent for non-spousal beneficiary

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letsgobobby
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inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Thu Jun 15, 2017 11:46 pm

I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all? Edit: not all. Vanguard just allowed me to establish an inherited IRA with my children as beneficiaries without consent.
Last edited by letsgobobby on Fri Jun 16, 2017 8:49 am, edited 1 time in total.

123
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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by 123 » Thu Jun 15, 2017 11:59 pm

That really sounds odd. Is the inherited IRA related to a 401K account? 401K accounts generally require the consent of a spouse to name a non-spouse as beneficiary and regular IRAs generally allow the account owner to name anyone as beneficiary, without spousal consent, if my memory is correct.

Edited to add:

I just did some web browsing and it looks like there are laws/regulations in some states, which may include Pennsylvania, that place limits/requirements on establishing beneficaries in some circumstances. I was surprised by this. If a certain custodian is also in Pennsylvania they may be very attentive to regulations in that state. Makes me think that a consult with an attorney over a simple matter like naming account beneficiaries could be useful in some circumstances to ensure that desired results are achieved.

The OP has raised an interesting issue I wasn't aware of.
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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by FIREchief » Fri Jun 16, 2017 1:19 am

letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?


I'm not sure I follow you here. Are you saying that if Joe inherits an IRA from his father, and wants to designate Joe Jr. as primary beneficiary of the inherited IRA, that Joe's wife has to approve?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Fri Jun 16, 2017 2:10 am

FIREchief wrote:
letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?


I'm not sure I follow you here. Are you saying that if Joe inherits an IRA from his father, and wants to designate Joe Jr. as primary beneficiary of the inherited IRA, that Joe's wife has to approve?

For this custodian, since I'm in a community property state, yes. I'm quite surprised.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by FIREchief » Fri Jun 16, 2017 2:36 am

letsgobobby wrote:
FIREchief wrote:
letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?


I'm not sure I follow you here. Are you saying that if Joe inherits an IRA from his father, and wants to designate Joe Jr. as primary beneficiary of the inherited IRA, that Joe's wife has to approve?

For this custodian, since I'm in a community property state, yes. I'm quite surprised.


Surprise is probably an understatement. What if Joe and his wife are separated and Joe is trying to get his affairs in order due to an illness. Does this mean she can hold him hostage and not allow him to designate a beneficiary?

Would you mind sending me a PM to tell me who the custodian is? I am also in a community property state and sure don't want to have this problem.
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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by Braje » Fri Jun 16, 2017 2:38 am

FIREchief wrote:
letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?


I'm not sure I follow you here. Are you saying that if Joe inherits an IRA from his father, and wants to designate Joe Jr. as primary beneficiary of the inherited IRA, that Joe's wife has to approve?

I think it means that Joe's wife has to approve if Joe what someone other then his wife as his beneficiary

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by FIREchief » Fri Jun 16, 2017 2:45 am

Braje wrote:
FIREchief wrote:
letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?


I'm not sure I follow you here. Are you saying that if Joe inherits an IRA from his father, and wants to designate Joe Jr. as primary beneficiary of the inherited IRA, that Joe's wife has to approve?

I think it means that Joe's wife has to approve if Joe what someone other then his wife as his beneficiary


Is that different than what I described?
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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by ResearchMed » Fri Jun 16, 2017 3:00 am

Does this refer to any amount, or only if someone wishes a spouse to be beneficiary of less than half?

(This also might vary by state.)

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by celia » Fri Jun 16, 2017 5:02 am

We live in a community property state and DH inherited part of a traditional and a Roth IRA. The accounts were split at an expensive brokerage house and the new account forms at that company required that the beneficiary either be a spouse or have the spouse's approval. In addition, they required the SSN of each beneficiary! I had a problem with that company and knew we were going to transfer the accounts to Vanguard where we have other accounts so I refused to be a beneficiary and give them my SSN. They still wanted my approval signature. So I signed and we made the temporary beneficiary be our trust.

After the accounts were transferred to Vanguard, we were able to put down any beneficiaries we wanted. I also have agent authorization on DH's accounts and, with his verbal approval, was even able to change his beneficiaries recently as the balances are getting small. (We are withdrawing more than the RMD in the traditional IRA as we will start SS at age 70.)

ResearchMed wrote:Does this refer to any amount, or only if someone wishes a spouse to be beneficiary of less than half?

In DH's case, it was a printed form and the account value didn't matter.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by bsteiner » Fri Jun 16, 2017 6:12 am

In some (but not all) community property states, the income from separate property is community property.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by mouses » Fri Jun 16, 2017 6:59 am

bsteiner wrote:In some (but not all) community property states, the income from separate property is community property.


Wow, that seems bizarre and illogical. Remind me never to get married :-) it seems like one thing after another. At least it's not like when a woman's property automatically became her husband's when they married. That used to be the case in England, not sure if it ever was in the U.S.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by aristotelian » Fri Jun 16, 2017 7:56 am

letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?

The assets may be separate but if you die your spouse is the default beneficiary. If you are married, your spouse has to sign off to list a different beneficiary, eg if you want the assets to transfer directly to your kids. Seems reasonable. What's the problem?

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Fri Jun 16, 2017 8:39 am

aristotelian wrote:
letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?

The assets may be separate but if you die your spouse is the default beneficiary.


Why do you think that's true? I'm not a lawyer but in general inherited assets maintained separately do not default to the spouse even in community property states.

If you are married, your spouse has to sign off to list a different beneficiary, eg if you want the assets to transfer directly to your kids.


Why do you say that? Inherited assets including IRAs are separate property. The spouse is not entitled to them, even in community property states. If they are, that is certainly news to me. Well, in fact I know Vanguard allowed me to make my children primary beneficiaries of another inherited IRA without spousal consent, so one of the custodians is in the wrong.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Fri Jun 16, 2017 8:40 am

ResearchMed wrote:Does this refer to any amount, or only if someone wishes a spouse to be beneficiary of less than half?

(This also might vary by state.)

RM

if spouse is not the sole primary beneficiary, I have to obtain her consent.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by aristotelian » Fri Jun 16, 2017 8:59 am

letsgobobby wrote:
aristotelian wrote:
letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?

The assets may be separate but if you die your spouse is the default beneficiary.


Why do you think that's true? I'm not a lawyer but in general inherited assets maintained separately do not default to the spouse even in community property states.

If you are married, your spouse has to sign off to list a different beneficiary, eg if you want the assets to transfer directly to your kids.


Why do you say that? Inherited assets including IRAs are separate property. The spouse is not entitled to them, even in community property states. If they are, that is certainly news to me. Well, in fact I know Vanguard allowed me to make my children primary beneficiaries of another inherited IRA without spousal consent, so one of the custodians is in the wrong.


I am not 100% sure if inherited assets are treated differently in my state but I don't k ow why it would be different. Spouse is not "entitled" but would be default if you died without a will. Who else would be the default beneficiary? (Assuming no kids from previous marriage) In any case just because VG has a box on the form does not necessarily mean it's required. It is possible that it is required in some states and not others or for some situations and not others.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Fri Jun 16, 2017 12:25 pm

The issue is not who is entitled, or who should be the default. The issue is the spouse has to provide written consent to relinquish her right to be the sole primary beneficiary, which applies in some ERISA cases but does not apply under my state law (as far as I can tell - again, IANAL) nor under federal law for an inherited IRA (whose rules may be different than 401ks, 403bs, or traditional IRAs). Hopefully an actual lawyer will correct me if I'm wrong.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by FIREchief » Fri Jun 16, 2017 12:38 pm

aristotelian wrote: The assets may be separate but if you die your spouse is the default beneficiary.


I believe that if you die without a beneficiary designation, the estate receives the IRA. I don't think there is such a thing as a "default beneficiary" for an IRA.

aristotelian wrote: If you are married, your spouse has to sign off to list a different beneficiary, eg if you want the assets to transfer directly to your kids. Seems reasonable. What's the problem?


It is "reasonable" in the vast majority of cases. I outlined an example above where it is likely unreasonable.
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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Sat Jun 17, 2017 1:33 am

bsteiner wrote:In some (but not all) community property states, the income from separate property is community property.

Along these lines, is there any straightforward way that the RMDs from these inherited IRAs can be maintained as separate property?

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by Penguin » Sat Jun 17, 2017 6:03 am

letsgobobby wrote:
bsteiner wrote:In some (but not all) community property states, the income from separate property is community property.

Along these lines, is there any straightforward way that the RMDs from these inherited IRAs can be maintained as separate property?

I'm not sure. Perhaps this is a way. Instead of the beneficiary of the IRA being "my heir" have the beneficiary be "this irrevocable retirement beneficiary trust". The distributions from the IRA can remain in the trust. Perhaps the contents of the trust are not considered community property. I don't know what happens if the trust distributes property to the "heir".
Jon

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Sat Jun 17, 2017 8:56 am

Penguin wrote:
letsgobobby wrote:
bsteiner wrote:In some (but not all) community property states, the income from separate property is community property.

Along these lines, is there any straightforward way that the RMDs from these inherited IRAs can be maintained as separate property?

I'm not sure. Perhaps this is a way. Instead of the beneficiary of the IRA being "my heir" have the beneficiary be "this irrevocable retirement beneficiary trust". The distributions from the IRA can remain in the trust. Perhaps the contents of the trust are not considered community property. I don't know what happens if the trust distributes property to the "heir".

that ship has sailed. original owner is deceased.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by Artsdoctor » Sat Jun 17, 2017 9:13 am

OK, this is a federal law governing 401k's. 401k's are different than IRAs.

By law, the spouse will inherit at least half of the 401k regardless of what the owner states on the beneficiary form. Even if the owner states that a child should get the whole thing, the spouse is entitled to at least half--and will get it regardless of the intent of the owner. The only way to get around that is to have the spouse sign a Spousal Waiver. This is true in all 50 states and is part of ERISA.

IRA's are not subject to the same law. IRAs are controlled by state law and the spouse is not automatically entitled to a portion of the assets. However, you need to know your state law in order to make appropriate estate planning moves.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Sat Jun 17, 2017 10:13 am

Artsdoctor wrote:OK, this is a federal law governing 401k's. 401k's are different than IRAs.

By law, the spouse will inherit at least half of the 401k regardless of what the owner states on the beneficiary form. Even if the owner states that a child should get the whole thing, the spouse is entitled to at least half--and will get it regardless of the intent of the owner. The only way to get around that is to have the spouse sign a Spousal Waiver. This is true in all 50 states and is part of ERISA.

IRA's are not subject to the same law. IRAs are controlled by state law and the spouse is not automatically entitled to a portion of the assets. However, you need to know your state law in order to make appropriate estate planning moves.

Yes, I'm aware of that re: 401ks.

But as you say, IRAs are different. Furthermore, this is inherited property. Even in community property states, inherited property is not community property unless admixed. Beyond that I need a lawyer.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by ofckrupke » Sat Jun 17, 2017 11:00 am

letsgobobby wrote:
bsteiner wrote:In some (but not all) community property states, the income from separate property is community property.

Along these lines, is there any straightforward way that the RMDs from these inherited IRAs can be maintained as separate property?


These posts put a spotlight on the ambiguities involved with IRAs in absence of an explicit rule as per ERISA. What is an IRA's income, and what is its corpus. All distributions from a pre-tax IRA get taxed as ordinary income, but all this implies is that if there is to be a distinction between the asset and the income therefrom, it can't just be inferred from the taxation rules.
So is an RMD/MRD a distribution of income, or a distribution of the body of the property? The rules for determining the amount aren't built around the account's increase in value from year to year, but only on its value on a particular calendar date; this suggests the latter. But in this formulation rather than being all income as suggested by the category and rate of taxation, the property could resolve in its extraction as all body and no income (if distributions were limited to RMDs).

One might keep track of distributions into the account from the individual holdings...but what if the IRA holds only collective income trust assets...or gold bullion? Must one go so far as to keep track of cost bases of individual holdings within the account, similar to the practice for taxable accounts, in order to distinguish income from not_income, to satisfy the property law of a particular state as noted by bsteiner?

It's easy to see how in different states, the conundrums might resolve along different paths, through legislation and case law.

edit to add: these issues don't necessarily resolve simply if the IRA's disposition is by passage to a beneficiary. Hence the potential attraction to a custodian of asserting a spouse's right to be primary beneficiary in absence of waiver, for an inherited account held in a particular state.

AND: IANAL.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by celia » Sat Jun 17, 2017 12:09 pm

letsgobobby wrote:
bsteiner wrote:In some (but not all) community property states, the income from separate property is community property.

Along these lines, is there any straightforward way that the RMDs from these inherited IRAs can be maintained as separate property?

Of course. Open up a new account for each Inherited IRA and an individual account. Have the Inherited IRA distributions go only to the individual account. Never put joint money in the individual account. That is what we are doing.

Of course, whatever you do in the individual account though, may impact your joint income taxes. If your state says income from separate property is community property, then you'll have to figure out what counts as income.


Edit to add:
According to this source (https://turbotax.intuit.com/tax-tools/t ... 22912.html ), it looks like income from separate property in Washington stays separate, not joint.
Nine states -- Wisconsin, Washington, Texas, New Mexico, Nevada, Louisiana, Idaho, California and Arizona -- have community property statutes that affect a married couple's federal income tax return.

...Some states consider income earned from separate property, such as dividends on stock owned prior to marriage, to be separate income reported only by the owning spouse on his return. Wisconsin, Louisiana, Idaho and Texas consider it income earned equally by both spouses.
Last edited by celia on Sat Jun 17, 2017 12:49 pm, edited 1 time in total.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by Dottie57 » Sat Jun 17, 2017 12:25 pm

FIREchief wrote:
letsgobobby wrote:
FIREchief wrote:
letsgobobby wrote:I am very surprised that a certain IRA custodian requires that for an inherited IRA (from a non-spouse), when they are residents of a community property state, a spouse must consent for the beneficiary to be anyone other than him/her.

I thought inherited assets were considered separate, even in community property situations, as long as the assets were not admixed?

Is this a feature of just this IRA custodian, or is it likely to be true for all?


I'm not sure I follow you here. Are you saying that if Joe inherits an IRA from his father, and wants to designate Joe Jr. as primary beneficiary of the inherited IRA, that Joe's wife has to approve?

For this custodian, since I'm in a community property state, yes. I'm quite surprised.


Surprise is probably an understatement. What if Joe and his wife are separated and Joe is trying to get his affairs in order due to an illness. Does this mean she can hold him hostage and not allow him to designate a beneficiary?

Would you mind sending me a PM to tell me who the custodian is? I am also in a community property state and sure don't want to have this problem.



State law? Not the custodian.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by aristotelian » Sat Jun 17, 2017 1:45 pm

Are you sure that you actually have to have the spouse sign? Just because there is a box for it does not mean that it is always required. Often they will have a space for a notary or signature guarantee that you just leave blank depending on the situation. Have you actually talked to VG?

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by bsteiner » Sat Jun 17, 2017 8:31 pm

celia wrote:... According to this source ..., it looks like income from separate property in Washington stays separate ....


An even better source is the statute: http://app.leg.wa.gov/rcw/default.aspx?cite=26.16.010.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Mon Jun 19, 2017 11:51 am

TIAA clarified that I have two options with the inherited IRA. The first is to "Stay in the Plan" which allows the account to stay in its current investment, retitles the account as Inherited IRA FBO letsgobobby, but does NOT require a spousal consent. The second is to rollover the inherited IRA into a new inherited IRA account at TIAA, which does NOT allow the account to stay in its current investment, also retitles the account as Inherited IRA FBO letsgobobby, and DOES require a spousal consent.

The distinction is lost on me - aren't they both inherited IRAs FBO LGB? But at any rate, since I plan to stay in the current investment and thus "Stay in the plan", in this case the spouse does not have to sign.

Some asked what the instructions say and the instructions state that if the account applicant is a resident of a community property state (and it names all of them, including mine), the spouse must sign. Although apparently the law varies from state to state and this may be required in some community property states and not others, the form does not make a distinction.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by bsteiner » Mon Jun 19, 2017 11:56 am

letsgobobby wrote:TIAA clarified that I have two options with the inherited IRA. The first is to "Stay in the Plan" which allows the account to stay in its current investment, retitles the account as Inherited IRA FBO letsgobobby, but does NOT require a spousal consent. The second is to rollover the inherited IRA into a new inherited IRA account at TIAA, which does NOT allow the account to stay in its current investment, also retitles the account as Inherited IRA FBO letsgobobby, and DOES require a spousal consent.

The distinction is lost on me - aren't they both inherited IRAs FBO LGB? But at any rate, since I plan to stay in the current investment and thus "Stay in the plan", in this case the spouse does not have to sign. ....


Perhaps the first option, stay in the plan, means stay in the plan, and not set up an inherited IRA. Some plans (probably not as many now that nonspouse beneficiaries can transfer the benefits to an inherited IRA) allow beneficiaries to remain as beneficiaries and get a stretch under the plan.

Another possibility, if your children are the contingent beneficiaries as to your share, and assuming you have enough money so that you'll never need this money, might be to disclaim so that your children can get a longer stretch.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by celia » Mon Jun 19, 2017 12:04 pm

letsgobobby wrote:TIAA clarified that I have two options with the inherited IRA. The first is to "Stay in the Plan" which allows the account to stay in its current investment, retitles the account as Inherited IRA FBO letsgobobby, but does NOT require a spousal consent. The second is to rollover the inherited IRA into a new inherited IRA account at TIAA, which does NOT allow the account to stay in its current investment, also retitles the account as Inherited IRA FBO letsgobobby, and DOES require a spousal consent.

The distinction is lost on me - aren't they both inherited IRAs FBO LGB? But at any rate, since I plan to stay in the current investment and thus "Stay in the plan", in this case the spouse does not have to sign.

The difference doesn't make sense to me either. But a third option is to roll over to another custodian that doesn't require the spouse to agree, such as Vanguard.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by letsgobobby » Mon Jun 19, 2017 12:38 pm

bsteiner wrote:
letsgobobby wrote:TIAA clarified that I have two options with the inherited IRA. The first is to "Stay in the Plan" which allows the account to stay in its current investment, retitles the account as Inherited IRA FBO letsgobobby, but does NOT require a spousal consent. The second is to rollover the inherited IRA into a new inherited IRA account at TIAA, which does NOT allow the account to stay in its current investment, also retitles the account as Inherited IRA FBO letsgobobby, and DOES require a spousal consent.

The distinction is lost on me - aren't they both inherited IRAs FBO LGB? But at any rate, since I plan to stay in the current investment and thus "Stay in the plan", in this case the spouse does not have to sign. ....


Perhaps the first option, stay in the plan, means stay in the plan, and not set up an inherited IRA. Some plans (probably not as many now that nonspouse beneficiaries can transfer the benefits to an inherited IRA) allow beneficiaries to remain as beneficiaries and get a stretch under the plan.

Another possibility, if your children are the contingent beneficiaries as to your share, and assuming you have enough money so that you'll never need this money, might be to disclaim so that your children can get a longer stretch.

Alas, there were no contingent beneficiaries. Great idea though.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by 2cents2 » Mon Jun 19, 2017 12:43 pm

aristotelian wrote:The assets may be separate but if you die your spouse is the default beneficiary. If you are married, your spouse has to sign off to list a different beneficiary, eg if you want the assets to transfer directly to your kids. Seems reasonable. What's the problem?


What if this is a 2nd wife/husband situation? Seems like it could be a way for the kids (stepchildren of the 2nd spouse) to get cut out of the inheritance.

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Re: inherited IRA in community property state requires spousal consent for non-spousal beneficiary

Post by FIREchief » Mon Jun 19, 2017 6:58 pm

2cents2 wrote:
aristotelian wrote:The assets may be separate but if you die your spouse is the default beneficiary. If you are married, your spouse has to sign off to list a different beneficiary, eg if you want the assets to transfer directly to your kids. Seems reasonable. What's the problem?


What if this is a 2nd wife/husband situation? Seems like it could be a way for the kids (stepchildren of the 2nd spouse) to get cut out of the inheritance.


This is exactly why none of this makes any sense. I live in a community property state and there is no such requirement for an inherited IRA. Assets inherited during a marriage are specifically excluded from community property unless the inheriting spouse chooses to declare them as such or comingles them in a manner than they are no longer distinct.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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