The World of IRAsThe World of IRAs

Last year’s developments serve to remind planners what can go wrong—and what can go right with planning.

Settlement Proceeds

In Ozimkoski v. Commissioner,¹ Thomas W. Ozimkoski, Sr. died testate, and his individual retirement account was payable to his estate. A will contest between his widow, Suzanne, and his son from a prior marriage, Thomas Jr., ended in a settlement agreement. Under that agreement, Thomas Jr. became entitled to his father’s 1967 Harley-Davidson motorcycle and $110,000 cash, free of income taxes. Suzanne was entitled to the rest, except for some personal property. 

Suzanne’s share included her husband’s IRA. In 2008, Suzanne transferred $235,495.46 into a rollover IRA titled in her name and treated it as her own IRA. Late...