Q&A

Can a former spouse change the beneficiary of an IRA in Texas?

Can a former spouse change the beneficiary of an IRA in Texas?

Generalizing retirement accounts is not always enough. In the state of Texas, for example, an IRA owner cannot change the beneficiary without written consent from his spouse or a court order. Problems can arise if the divorce decree doesn’t specifically mention the investment account and the former spouse doesn’t consent to removing the name.

Can a ex wife be the beneficiary of an IRA?

Keeping an ex-wife named as your beneficiary on an IRA only complicates determining who inherits the account. Even if you are remarried at the time of death, your ex-spouse might still have a right to the money legally. Even without a will, certain assets are exempt from probate.

What happens when you take money out of an inherited IRA?

Withdrawals from Inherited Roth IRA. If the inherited account was a Roth IRA, any withdrawals of earnings taken prior to the point at which the original owner would have satisfied the 5-year rule will be subject to income tax, though not the 10% penalty. (This is also the same as for a spouse beneficiary.)

When does a beneficiary have to withdraw from an IRA?

The IRS requires the beneficiary to withdrawal all IRA funds by the fifth year following the owner’s death, although the five-year rule doesn’t apply if the original IRA owner dies after starting his required withdrawals. A will specifies who oversees the estate and who can access the money.

What should I do if my parent inherits an IRA?

If you are inheriting an IRA from a parent who has recently passed away, consider these rules in your approach to processing the required documentation: RULE NO. 1 – DO NOT DO ANYTHING ABRUPTLY. BE DELIBERATE IN EVERY STEP AND CONSULT AN EXPERT.

When to take money out of inherited IRA?

RULE NO. 3 – TIME YOUR DISTRIBUTION OF THE PROCEEDS TO YOUR PARTICULAR NEEDS SO YOU CAN CAPTURE MAXIMUM TAX BENEFITS OVER THE ALLOWABLE 10-YEAR DISTRIBUTION WINDOW AND AVOID PENALTIES. ■ When you withdraw the money from the Inherited IRA in the 10-year window is largely determined by when you need the proceeds.

When do I have to withdraw from my parent’s IRA?

RULE NO. 2 – IF YOUR PARENT WAS PAST AGE 72, FIND OUT IF HE OR SHE MADE THE REQUIRED MINIMUM DISTRIBUTION THAT YEAR. ■ If yes, great. You won’t have to make one for them. ■ If no, consult an advisor and withdraw the remaining RMD by December 31 of the year of your parent’s passing.

Can a spouse be the beneficiary of an inherited IRA?

This can be your best choice if you’re under the age of 59½ or you’re older than your spouse. When you set the account up so you’re considered the beneficiary of the inherited IRA instead of the owner, your required minimum distributions are determined by your spouse’s age at the time of his death.