When a beneficiary inherits an IRA account, they have a few options to consider when it comes to what to do with the inherited assets.  An inherited IRA, also sometimes called a beneficiary IRA, is an account that can be opened by a beneficiary or beneficiaries following the original IRA owner’s death.  Inherited IRAs allow the beneficiary to receive the same tax-deferred growth as the original owner.

Inherited IRA Rules

There are a number of rules that must be followed for inherited IRAs.  These include:

  • Required minimum distribution (RMD) rules – this is the minimum amount that must be distributed to beneficiaries from inherited individual retirement accounts and is based on the life expectancy of the beneficiary, as well as other factors.
  • Inherited IRAs must be re-titled and must include the fact that the account is inherited and include the name of the deceased. Spouses can roll inherited IRAs into their own existing IRA accounts without penalty.
  • Beneficiaries have nine months from the date of death to make certain decisions about inherited IRAs.
  • Rules for inherited IRA taxes depend on the type of IRA you inherit, whether you are a spouse or non-spouse beneficiary, whether you are the sole beneficiary or are sharing the inheritance, and other factors.  It is best to talk to a qualified tax adviser for more information about inherited IRA taxes.

Open or Transfer an Inherited IRA

If you would like more information about opening an inherited IRA account or transferring funds from an inherited IRA into an existing IRA, contact one of the experienced retirement planning specialists at Alamo Capital.  We can help you evaluate your options when inheriting an IRA and can answer any questions you may have about the process of IRA inheritance, inherited IRA distribution and inherited IRA rules.

For more information about inherited IRAs or to open an inherited individual retirement account, please either call our office at (877) 68-ALAMO – or – (877) 682-5266, fill out or brief contact form or email our office at [email protected].