That is your political opinion and one I do not share, but that is
your right.

I an economist and a staunch libertarian. I'm laissez-faire and
minimal government to the bone. I happen to think that most industries
WOULD be better off if government agencies were not implemented to
regulate them.

Such issues are highly relevant to financial planning. To regard them as
"off topic" just restricts what is considered to be "on topic" to views that
everybody agrees upon and which therefore are bland and have less practical
importance for newbies and people trying to learn more.

I was referring to the fact that it has nothing to do with "Non-spouse
inherited IRA rollover/transfer? Options" (the TOPIC of this thread).
Nothing either one of us has said has added insight to Rich's original
question about inherited IRAs. I would be happy to discuss it openly
so that others may also be exposed to our varying point of view, but
start a new thread (or "topic", if you will).

A relative of mine has just inherited a share of a trad IRA and a Roth
IRA from her father.

She's contacted her late father's financial advisor (who works with
American funds -- her dad's trad and Roth IRA accounts are with
American). The advisor is trying like heck to discourage my relative
from transferring her share of the inherited IRA to an inherited IRA
account at Fidelity (which is where all her other investments are
kept).

I haven't read the replies to your post (yes was back in Yosemite) but
I'd suggest having your relative set up an IRA-BDA through the custodian
for her father's IRA, and have them transfer her share of the IRA to it.
She can just make like she's leaving everything there. This is the "path
of least resistance" for the change of title for the account.

One thing we've wondered is if there's any way to cut him out
of the loop -- like sending the claims for straight to American
and so attempting to open an IRA-BDA directly with them
and then doing the ACAT.

One thing we've wondered is if there's any way to cut him out
of the loop -- like sending the claims for straight to American
and so attempting to open an IRA-BDA directly with them
and then doing the ACAT.

Answering my own question -- it turns out we can't. American
only sells through financial advisors -- you can't even get
forms without being hooked up with an advisor.

Rich, you still should be able to do this. The distribution to the
IRA-BDA could be done in-kind so there shouldn't be any loads
assessed. It is correct that she needs to sign on as a client even if
only for a short time period -- that's just a regulatory reality.

It's going to be a new account owned by her, and so far the only person
signing a form with the custodian is the decendent, correct?

That Washington Mutual fund is probably one of the AF family so maybe
all of them are? If so it's possible that she would need to sell all
funds and move to a money-market, if none of the funds can be
custodied through Fidelity retail (I forget how that works with
AF).

It's not a bad thing to have to work with an advisor, someone needs to
handle the paperwork and transfer to the IRA-BDA.

I've been told (and given the cite to the Regs.) that the bar on
"rollovers" does *not* include a check being made out to the receiving
inherited IRA. So why can't AF just make out an analogous
check and send it to Fido (or my relative) without opening an account

It's not a bad thing to have to work with an advisor, someone needs to
handle the paperwork and transfer to the IRA-BDA.

I appreciate you're an advisor too, but that paperwork
is no big deal and (aside from the rules imposed by AF) no advisor
needs to deal with it. It's not complicated.

ACAT stands for Automated Customer
Account Transfer. It's an electronic system that links brokerage firms,
and is the easiest way to move securities from one custodian to another.
A nice thing about it is that you don't need to inform your former
custodian/broker of the transfer -- you intitiate a transfer at the
receiving firm, not the delivering firm.

If you use ACAT the steps are a bit simpler and you can
monitor each step. There's probably less risk of a 1099 being coded
incorrectly as a taxable distribution, and if it happens it's an easy
fix. Checks are messy, I avoid them as much as possible and use ACAT
instead.

1. This apparently applies to rollovers/transfers in kind of stocks
and bonds. Does it also apply to cash? For example, could I close
out a brokerage IRA at Merrill Lynch and transfer the cash via ACAT to
Fidelity mutual funds and buy Fidelity mutual funds?

2. Is this process also available for regular (non-IRA) accounts?

If so, how does an investor or beneficiary initiate ACAT - is it as
simple as contacting the new custodian?

1. This apparently applies to rollovers/transfers in kind of stocks
and bonds. Does it also apply to cash? For example, could I close
out a brokerage IRA at Merrill Lynch and transfer the cash via ACAT to
Fidelity mutual funds and buy Fidelity mutual funds?

2. Is this process also available for regular (non-IRA) accounts?

This apparently applies to rollovers/transfers in kind of stocks
and bonds. Does it also apply to cash? For example, could I close
out a brokerage IRA at Merrill Lynch and transfer the cash via ACAT to
Fidelity mutual funds and buy Fidelity mutual funds?

For that Merrill to
Fidelity example, you would open a Fidelity brokerage account and fill
out a transfer of assets request (whatever they call that form) and
attach a recent statement for your Merrill account.

That's a good question. A check to Fidelity F/B/O an existing IRA-BDA
should work. But a) it needs to be made out the right way and b) make
its way through the mail and c) Fidelity probably won't accept the
check without a specifically worded letter from the custodian...saying
it's just a custodian-to-custodian transfer, not reportable, naming
the decedent, and some other details. That's more stuff for the former

[For posterity: I keep saying ACAT...ACAT stands for Automated
Customer Account Transfer. It's an electronic system that links
brokerage firms, and is the easiest way to move securities from one
custodian to another. A nice thing about it is that you don't need to
inform your former custodian/broker of the transfer -- you intitiate a
transfer at the receiving firm, not the delivering firm.]

That stuff all goes into the application for the Fidelity account.
Once the account application has been made and the account is set
up, an account number is generated by Fidelity. The existing
custodian then makes the check out to Fidelity with the account
number in question on it. Fidelity knows exactly what it is and
what to do with it then because it was already set up that way.

I don't think that's possible for this - it is a new account and
the ACAT requires the accounts to be registered to exactly the
same owner and name, doesn't it? This new account is different
and differently owned from the account from which the assets are
being transferred.

I'm recommending that Rich do an IRA-to-BDA transfer within AIG/AF,
and then BDA-to-BDA, so yes he can use ACAT for this second
step. You're correct that you couldn't use ACAT for moving money from
the decedent's IRA to a BDA at Fidelity.

Oh, one caveat on all this...ACAT often triggers a fee from former
custodian ($50 is typical) but it depends on the account type and
custodian. Worth it, IMO, to avoid a potential several-month delay.