Control Is Everything

by Pessin Katz Law, P.A.

In Private Letter Ruling 201423043, (“PLRs” only apply to the taxpayer involved but are often used as “guidance”, and not “precedent”, by taxpayers and the IRS.) the IRS ruled that a surviving spouse could roll over her deceased husband’s Roth IRA payable to a trust into her own Roth IRA.  Consequently, she would be able, under current roll over rules, to avoid having to take required minimum distributions from the IRA and could name beneficiaries for the roll over to her own Roth IRA.

The decedent maintained two Roth individual retirement accounts; Roth IRA X and Roth IRA Y (the “Roth IRAs”). He designated a trust, Trust C, as the beneficiary of both.  Trust C provided that upon the decedent’s death, his spouse became the sole trustee of the Trust.  Furthermore, Trust C provided that it divided into two sub-trusts, the Marital Trust and the Family Trust.

The surviving spouse’s decision as to the property to be allocated to the Marital Trust would be final and conclusive and binding upon all beneficiaries, with certain exceptions not relevant to the PLR.  The surviving spouse wished to allocate Roth IRA X and Roth IRA Y to the Marital Trust.

Under the terms of Trust C, the surviving spouse, as Trustee, is to pay all net income of the Marital Trust to herself. In addition, she may distribute to herself, or use for her benefit, any portion or all of the principal of the Marital Trust (in cash or in kind) as she deems desirable for her support, comfort, and welfare, in her accustomed manner of living, or “for any other purpose [she] believes to be for [her] best interests.” The provision further states that the decedent’s primary concern is for his spouse’s well-being and happiness and she need not consider the interest of any other beneficiary in making distributions to her or for her benefit.

As sole trustee of Trust C, the surviving spouse proposed to make a distribution of the Roth IRAs to herself as beneficiary of the Marital Trust under her power to do so “for any purpose” because to do so is in her “best interest.” She advised the IRS of her intention to roll over the distribution into one or more Roth IRAs created and maintained in her own name.

Under Reg. § 1.408-8, Q&A 5, a surviving spouse of an IRA owner may elect to treat the spouse’s entire interest as a beneficiary in an individual’s IRA as the spouse’s own IRA, but only if the spouse is the sole beneficiary of the IRA and has an unlimited right to withdraw amounts from the IRA. If a trust is named as beneficiary of the IRA, this requirement is not satisfied even if the spouse is the sole beneficiary of the trust.

 The PLR stated that:

“Generally, if the proceeds of a decedent’s IRA are payable to a trust, and are paid to the trustee of the trust, who then pays them to the decedent’s surviving spouse as the beneficiary of the trust, the surviving spouse is treated as having received the IRA proceeds from the trust and not from the decedent. Accordingly, such surviving spouse, in general, is not eligible to roll over the distributed IRA proceeds into her own IRA.

However, the general rule will not apply where the surviving spouse is the sole trustee of the decedent’s trust and has the sole authority and discretion under trust language to pay the IRA proceeds to herself. The surviving spouse may then receive the IRA proceeds and roll over the amounts into an IRA set up and maintained in her name.”

The PLR recited the following conclusions by the IRS:

  • The Roth IRAs will not be treated as inherited IRAs respect to the surviving spouse.
  • The surviving spouse is eligible to roll over or have transferred, by means of a trustee to trustee transfer, a distribution of the proceeds of the Roth IRAs into a Roth IRA created and maintained in her own name, as long as the rollover of such distribution occurs no later than the 60th day from the date said distribution is made from the IRA.

In sum, the IRS concluded that the facts set out above satisfied the requirements of Reg. § 1.408-8, Q&A 5, set forth above.  Since the surviving spouse met those requirements she fell under the exception for the creation of a roll over Roth IRA in her own name.

The rules regarding pension and IRA estate planning and distributions are complex.



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pessin Katz Law, P.A. | Attorney Advertising

Written by:

Pessin Katz Law, P.A.

Pessin Katz Law, P.A. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.