Double Check me please - HOH and Disabled Dependents and Inherited Retirement

[BulldogTom]

TP has 2 totally disabled adult children living with her.   Ex-husband passed away in 2022 leaving his state retirement plan (CalPers) to the kids - 17K each.   Kids get a 1099R.  TP puts the money into a savings account for the children for future use.

Couple questions:

1.  Is Taxpayer still HOH since the money was not used on dependents for support?
2.  Are the kids eligible to roll the funds to their own IRA since they are totally disabled?  If so, is it too late because they already took possession of the funds?

Thanks

Tom
Longview, TX

[DANRVAN]

1 hour ago, BulldogTom said:

  If so, is it too late because they already took possession of the funds?

It would take a Private Letter Ruling to grant an extension of time for  the rollover; and to show reasonable cause for a uniformed decision.  I think they might have a case.  I researched and filed a PLR several years ago and found a lot of favorable cases where mental capacity was compromised.  My case was a surviving spouse who inherited husband’s funds,  she was granted an extension of time to make the rollover from the date of the ruling.

[Medlin Software, Dennis]

Too many unknowns to get the full picture. SSI could be an issue (means test).  Money put into ABLE or not?

Dealing with finances of someone likely receiving aid is a specialty, with very few one stop resources.

[DANRVAN]

1 hour ago, BulldogTom said:

Are the kids eligible to roll the funds to their own IRA since they are totally disabled?

I would refer that question to a financial advisor.

[Lee B]

Why would you roll it to an IRA. Do they have other taxable income?