News & Insights

IRS Alert

By: Michael I. Gordon


If you have an IRA upon which you have named someone other than your spouse as beneficiary or if you are a named beneficiary of someone else’s IRA, be aware that a recent letter ruling from the IRS should act as a warning that unless arrangements are made for a trustee-to-trustee transfer, the proceeds of that IRA will be immediately taxable. Thus, it is important to arrange for the trustee of the IRA being distributed goes directly to the trustee for a rollover IRA created by the transferee or serious tax consequences will attach. If a check is made out to the named beneficiary and that beneficiary then attempts to put the funds into a rollover IRA, based upon this ruling, that method of transfer will not avoid immediate taxation.
For more information, please call Estate Planning Group at (410) 659- 1300 or e-mail estateplanning@wcslaw.com.