The first Slott Report Mailbag of 2014 involves several topics we go into detail on at our 2-Day IRA Workshop (one is coming up on January 30-31, 2014 in New Orleans.) Spousal waivers, the 60-day IRA rollover window and required minimum distributions are the topics of the day, and our team of IRA Experts answered each below. As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.
1.
Does my managed account IRA wrap fee count towards my mandatory RMD yearly total?
Thanks!
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Answer:
No. IRA fees, whether they were deducted from your IRA balance or paid by you out-of-pocket, are not considered distributions and thus do not count towards your RMD.
2.
My father designated his two adult daughters as beneficiaries of his IRA with Bank of America. He stopped making contributions to the IRA several years ago. In 2011, he remarried, and then died suddenly in 2013. He did not leave a will. The daughters filed a claim for the IRA with B of A, but the bank refuses to distribute funds to them because the new spouse won't sign a waiver of any interest in the IRA. She has no interest because there were no contributions (community or separate property) to the IRA during the 23-month marriage. A certified copy of the marriage certificate was turned over to the bank proving no contributions were made after the date of the marriage. The Bank still refuses to distribute the funds and the widow will not communicate with the bank (or the daughters). Is there anything we can do, other than file a lawsuit against the bank, to get B of A to follow the law and distribute the funds to the designated beneficiaries?
Any suggestions you may have are very much appreciated. Thank you in advance!
Sharon
Answer:
Unless your father lived in a community or marital property state, spousal consent or a spousal waiver is generally not necessary for the daughters to obtain the IRA funds as the named beneficiaries of his IRA under state law. You may want to get a copy of the IRA document to see if there is any language in it that requires a spousal waiver. Also, look at the IRA beneficiary form to make sure his daughters are indeed the named beneficiaries of the IRA.
You also should try escalating your request for payment. Ask to speak to a supervisor or their supervisor, or to speak to someone in the legal department. Ask them to show you, in writing, where it says that you need to have a spousal waiver signed. Keep track of the names and locations of anyone you speak to and keep copies of any written correspondence. Let them know that you are contemplating a lawsuit and that part of that lawsuit will be that they must pay your legal costs.
3.
If I made a withdrawal from my Roth IRA in 2013, and I am under age 59 ½ and the withdrawal consisted of past contributions (not earnings), can I put the money I withdrew back into my Roth IRA before I file my 2013 taxes as if it never happened?
Thank you!
Answer:
You may do a rollover of those funds if it’s within 60 days of when you received the funds. If it’s after 60 days, then it’s not rollover eligible. If the Roth IRA distribution consisted only of contributions, and no conversions or earnings, then none of it will be taxable or subject to the 10% early distribution penalty. You and IRS will receive a 1099-R from the Roth IRA custodian reporting your distribution. You will need to include that form on your 2013 tax return. Consult with your tax preparer or see the instructions for IRS Form 1040 to determine what you will need to do.
- By Joe Cicchinelli and Jared Trexler
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