Death of Spouse - Assume (Rollover) IRAs

Unknown

Quicken 2016 Premier, Windows 7

My husband died recently and I am assuming his Traditional and Roth IRAs (100% beneficiary on everything). My understanding is that all of the holdings will be transferred to my corresponding IRAs at the same financial institution, and treated for tax purposes as if they had originally been mine all along.

Quicken has downloaded a slew of REMOVED transactions for his accounts and corresponding ADDED transactions for my accounts. Before I accept these transactions I'm seeking advice on whether there is a preferred way of entering this IRA assumption (sometimes called spousal rollover) event into Quicken.

Can I treat this the same as someone rolling a retirement account or IRA into a different IRA (but in the same owner name), or is the change of ownership of an IRA's holdings important to track somehow in Quicken?

Ideally Quicken would maintain our separate IRA accounts until my husband's date of death, then his assets would transfer seamlessly to my account on that date and his account will show zero balance (and can then be hidden in Quicken, but still accessible for historical purposes). I should not have to enter any basis or purchase date information into my account for the transferred assets.

Before I accept any transactions I would like to enter it all manually the best possible way, then just match up the downloaded transactions from the financial institution.

Thanks for any help you can offer.

Jim_Harman

Rather then the downloaded Removed and Added transactions, I suggest you not accept those transactions and use "Shares transferred between Accounts" in Quicken to move the assets from his accounts to yours. This will create one Removed transaction for each security in his account, and a whole slew of Added transactions in yours, corresponding to the tax lots. Do a backup first, just in case something goes wrong.

As you note, it isn't important for tax reasons to track the purchase dates and cost basis, but this method will preserve this info for performance tracking.

Jim_Harman

Note: It appears that "assume" is the correct term to use for your situation, not "inherit" or "roll over." 

See this link to Vanguard's info on this topic:

https://investor.vanguard.com/inherit/ira

Unknown

Thank you Jim. That is what I had in mind but I appreciate the confirmation that it's what I should do.

I just tried this with one security, going into his IRA and doing a "Shares transferred between Accounts" with my IRA as the receiving account. Quicken generated a REMOVED transaction in his account exactly as expected (and suggested a match to the correct downloaded transaction).

However, when I open my IRA's register, there is no sign of any ADDED transaction! It's as if the shares just vaporized...removed from his account but they don't show up anywhere.

I deleted the "Shares transferred" entry in his account and repeated the entire process, just in case I had made an error, but with the same result.

Is it possible that Quicken is "smart" enough to know that these two IRAs have different registered owners and therefore won't allow a transfer of this type? 

I'm baffled!

To further confuse things, when I open that security in the Security Detail View, I do see all of the ADDED transactions listed for my account (each one is repeated there twice, since I attempted this process twice). Yet nothing shows in my account register and if I check the holdings for my account, this security does not show up either.

Now what? Do I delete those phantom ADDED transactions (2 of each) to get back to baseline. Then how should I proceed? This seems wrong.

Unknown

Jim Harman said:

Note: It appears that "assume" is the correct term to use for your situation, not "inherit" or "roll over." 

See this link to Vanguard's info on this topic:

https://investor.vanguard.com/inherit/ira

Yes, the accounts actually are at Vanguard and they use the term "assume" but a member of the Transitions Team told me that some other financial institutions may refer to it as a "spousal rollover" (which is actually not correct). I included that term in my original post in case someone with a similar question, but using a different financial institution, comes to the post at some time in the future. Thanks for confirming that "assume" is the correct term.

Jim_Harman

There is a new bug in Quicken 2018 where transfers sometimes are not displayed right away in the receiving account.

I thought this only applied to cash accounts and only to 2018, but you might try exiting and restarting Quicken to see if the transfers are displayed properly after the restart..

Jim_Harman

Also make sure the receiving account is sorted by date by clicking the Date column heading, in case the transactions are there but are someplace else in the list.

Jim_Harman

Also make sure you selected the correct destination account when you entered the Transfer. Maybe you have a similarly named, hidden account that got the transfer by mistake?

Unknown

Jim, You are brilliant, and I am embarrassed. What a rookie mistake (and I'm NOT a Quicken rookie by any stretch). You are absolutely correct, there was a very similarly named (zero balance) hidden account into which the shares were transferred. This is an artifact of a few years ago when Vanguard made us change our IRAs to "IRA Brokerage" accounts.

I restored to the backup and repeated the Share Transfer. Now it seems your advice in your first post worked perfectly. Everything is now copacetic, thanks to your lateral thinking.

I apologize for my dumb error--admittedly with the recent sudden loss of my husband my brain is not quite firing on all cylinders. This a good reminder to be extra careful with any financial transactions or decisions in the upcoming weeks until I'm sharper mentally.

Again, thank you so much for the prompt replies and extremely thorough treatment of my question. I am very appreciative of your help.

Jim_Harman

H P said:

Jim, You are brilliant, and I am embarrassed. What a rookie mistake (and I'm NOT a Quicken rookie by any stretch). You are absolutely correct, there was a very similarly named (zero balance) hidden account into which the shares were transferred. This is an artifact of a few years ago when Vanguard made us change our IRAs to "IRA Brokerage" accounts.

I restored to the backup and repeated the Share Transfer. Now it seems your advice in your first post worked perfectly. Everything is now copacetic, thanks to your lateral thinking.

I apologize for my dumb error--admittedly with the recent sudden loss of my husband my brain is not quite firing on all cylinders. This a good reminder to be extra careful with any financial transactions or decisions in the upcoming weeks until I'm sharper mentally.

Again, thank you so much for the prompt replies and extremely thorough treatment of my question. I am very appreciative of your help.

Sorry for your loss.

I'm glad I could help, and at least making changes in Quicken doesn't usually change anything in the real world.

I have found that with financial transactions it is often very helpful to write down what I am planning to do then wait a day or two and review the plan before hitting the "Buy" or "Sell" button. Then I always read the confirmation screen very carefully before completing the transaction.

UKR

May I recommend that you rename any of the old "similarly named" defunct account names so they can't be used again, accidentally, at least not easily?
Just rename the account name and put a "Z" or "~"(tilde) character in front of the name, e.g. "~Vanguard IRA". That pushes the account to the very bottom of any selection lists, below any live accounts.

Also please don't forget to customize the Portfolio views (under the Investing tab), to remove old accounts from the view and rearrange the order in which the new accounts show in the view.

Unknown

UKR said:

May I recommend that you rename any of the old "similarly named" defunct account names so they can't be used again, accidentally, at least not easily?
Just rename the account name and put a "Z" or "~"(tilde) character in front of the name, e.g. "~Vanguard IRA". That pushes the account to the very bottom of any selection lists, below any live accounts.

Also please don't forget to customize the Portfolio views (under the Investing tab), to remove old accounts from the view and rearrange the order in which the new accounts show in the view.

Excellent suggestion. Thank you!