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  • #16
    Originally posted by billy View Post
    I do not want an IRA (well as long as the backdoor is still allowed).
    Inherited IRA accounts are separate and distinct from owned IRA accounts. You do not include the balances of all inherited traditional, SEP and SIMPLE IRA accounts on your owned IRA Form 8606 Line 6. If an inherited IRA has non-deductible basis, you actually have to complete a separate inherited Form 8606 to track the basis.

    Bottom line: You can rollover the inherited 401k/403b accounts to an inherited IRA without any effect on the Backdoor Roth. Make sure it is a direct* trustee -> trustee rollover from the inherited 401k/403b to the inherited IRA.

    *A direct rollover check is most often mailed to the individual for forwarding the IRA custodian. It should not be made out to you personally. If you deposit such a latter check to your own account, you will have taken ownership and it can not be rolled over to an inherited account. However, since you are the spouse, you could roll that over to any accepting non-IRA employer retirement plan or an owned IRA which you are trying to avoid.

    Note: There is a very significant estate reason to roll it over to an inherited IRA or an owned non-IRA employer retirement plan. Non-spouse beneficiaries can not rollover an inherited 401k, 403b or 457b plan. They must take a lumpsum distribution.

    P.S. I apologize for the excessive use of italics and bolding, but this is an area with very specific technical requirements. Hopefully, I haven't left anything out or made any errors. I would appreciate the more knowledgeable members double checking me before my namesake takes action on this post.

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    • #17
      Originally posted by Kamban View Post

      Cable / internet companies don't care about name as long as they get paid for what they invoice.

      The time to change would be when they increase their rates, as they do periodically once a year or so.
      The problem comes only when there is a problem.
      Water bill seems so simple. $26.90 per month. In the name of a deceased person. Original inquiries were going to require $500 deposit on each utility. Let it ride.
      In Sept , billing error and got a bill for $2k. (This is for 100k usage and the property uses 1k per month). The water company instituted "new procedures". State your name and the last four digits of SS. They won't talk to you unless you lie. There is no legal way to "protest" or resolve. The deceased if gone for 5 years. Guess what? They won't allow any protest even if you change. You see, only the account holder can authorize any discussion. Stupid policy because they can only file a claim against and individual. Good luck with that. They won't change the name and responsibility. This reminded me to checked today. 3 months and I lied to get it fixed.
      They have no interest in fixing the source of the billing error, only tunnel vision on each account. Government services at it's finest. On TV there was a segment, thousands of people with the same screw up and no accountability. They are responsible for accurate reading, but you pay for mistakes.

      The point is to eventually move everything out of her name. Unless you want to call in and identify yourself with a different voice.


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      • #18
        Billy so sorry for your loss. I hate that you are dealing with these issues at this time of year. Please keep posting and let us all know how it goes.

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        • #19
          Originally posted by spiritrider View Post
          Inherited IRA accounts are separate and distinct from owned IRA accounts. You do not include the balances of all inherited traditional, SEP and SIMPLE IRA accounts on your owned IRA Form 8606 Line 6. If an inherited IRA has non-deductible basis, you actually have to complete a separate inherited Form 8606 to track the basis.

          Bottom line: You can rollover the inherited 401k/403b accounts to an inherited IRA without any effect on the Backdoor Roth. Make sure it is a direct* trustee -> trustee rollover from the inherited 401k/403b to the inherited IRA.

          *A direct rollover check is most often mailed to the individual for forwarding the IRA custodian. It should not be made out to you personally. If you deposit such a latter check to your own account, you will have taken ownership and it can not be rolled over to an inherited account. However, since you are the spouse, you could roll that over to any accepting non-IRA employer retirement plan or an owned IRA which you are trying to avoid.

          Note: There is a very significant estate reason to roll it over to an inherited IRA or an owned non-IRA employer retirement plan. Non-spouse beneficiaries can not rollover an inherited 401k, 403b or 457b plan. They must take a lumpsum distribution.

          P.S. I apologize for the excessive use of italics and bolding, but this is an area with very specific technical requirements. Hopefully, I haven't left anything out or made any errors. I would appreciate the more knowledgeable members double checking me before my namesake takes action on this post.
          Thank you. I do not think my plan will allow for inherited 401k/403b to roll into my 401k but I asked and am awaiting a response. I do know they will not allow an inherited IRA to be rolled into the account. I'm googling benefits of inherited IRA as that may be the easiest choice then

          --edit- it seems my plan does allow the direct rollover into my 401k- is there any reason I am missing why I shouldnt do this? Im still relatively young, no kids, no need for the money until RMD age (wife was younger than me).
          Last edited by billy; 12-21-2021, 02:02 PM.

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          • #20
            If you have no need for access to the money prior to age 59 1/2, the best action is probably to do a direct rollover to your own 401k for the following reasons.
            1. It will not interfere with the Backdoor Roth, for as long as that may last.
            2. It will be subject to ERISA anti-alienation asset protection. This is the highest level of asset protection available.
            3. You have full beneficiary options for both a spouse and non-spouse beneficiaries.
            4. It will simplify the number of accounts and avoid any inherited account issues including unneeded RMDs.

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