Traditional IRA Trustee-To-Trustee Transfer

premmer | Mar 27, 2023 | 26 posts since 2018

I plan to do my first traditional IRA trustee-to-trustee funds transfer in the near future. The new CU trustee will accept the funds for the IRA CD account as a wire transfer. If the current trustee is willing to wire the funds to the new CU trustee at maturity, is there any reason I should not use this method? I will request the current trustee treat this transaction as a trustee-to-trustee transfer thus a 1099 is not required per IRS guidelines as it is a non-taxable transaction.

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Answers

Zemo999 | Mar 27, 2023 | 103 posts since 2017

Not sure my anser will be useful to you, but: For every transfer of IRA funds that I've ever done, and I've done a lot of them, it wasn't done by wire, but by the sending institution mailing a paper check overnight to the receiving institution. This was initially upon the recommendation of an FCU that I've done business with for years, and has the most competent 'special accounts' (i.e., IRA) departments I've ever encountered. Other institutions have followed suit with that method. So there must be a reason for the wire being shunned in place of the overnight check, and I'd think it would have something to do with there being no question that you never had access to the funds, so that there's no question with the IRS that this wasn't a distribution. Wish I could be more helpful as to the whys of this.

Ally6770 | Mar 27, 2023 | 4,292 posts since 2010

I have always have done trustee to trustee if the institution was not close to me. If the institution was close to me within a hours drive, I went to the institution and they made to the check out to the institution that it was going to as a (traditional or Roth IRA for the benefit of the person) and at the bottom of the check the account number. Only one would not over night it out of state by me or them. The ones that overnighted it, I could follow it and get a picture to print on the computer of the signature of the person who signed for it. I also PM messaged the institution that it was signed for and it was in my account that day.
My sister had a check mailed from a bank and hour away and it took 3 weeks for it to be processed. The girl was on vacation and somehow it got placed under her calculator but also it was found when I went with her to the credit union and made a scene. The contacted the person who distributes the mail, went to the office and looked for it. This is the same place that a director told me that "OHHH mistakes will be made" when they lost the signature card of my husband's IRA when I went to disclaim it so the kids could inherit it when he passed. I had a copy of it and they refused to accept it. In both instances I called NCUA. Not sure what they did for my sister except backdate the CD and she got the higher interest because the rate had went lower. For the lost signature card, NCUA made the credit union and the people get training in my incident and made sure the transaction and Roth conversion was done the same day they contacted me, with me in the office. They were on a conference call and I could listen in while it was being done.
At a different place last Dec. I tried to do a large wire transfer when it took me nearly 5 hrs waiting for the transfer approval because they could find no one to approve it. No one should have vacation, be out on a personal day, be sick, and not have someone to replace them in such a high position. I refused to sit and wait. I told them I was here first and I want you to keep trying to do my transaction. If I sit you will take care of someone in the long line.Have them do an over night and give you the information so you know who signed for it and print or take a picture of it.

njs | Mar 27, 2023 | 71 posts since 2019

You should be completing the forms with the accepting institution for a direct transfer. Then they will forward the instructions to the sending institution. The accepting institution takes care of all this. I would check with your original institution around maturity and make sure they received the paperwork for the direct transfer.

Ally6770 | Mar 27, 2023 | 4,292 posts since 2010

And send for it early so you get it back to them by the time the CD matures. If you shop for rates and are waiting for a good rate make sure you have the CD transferred to a Roth or Traditional IRA savings account and that is what should be debited when you decide where it goes. . Make sure they transfer the interest on the savings account also.

happyharold4 | Mar 28, 2023 | 388 posts since 2022

I just closed a Traditional Ira at Stinkrony Bank, but I didn't chose wire transfer option on the receiving banks request form. So Stinkrony closed my account and held up the funds a full 23 days from when they received the request. 23 days of interest lost. I'll only do wire transfer going forward.

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