What happens if I inherit a Traditional IRA?

If you inherit a traditional IRA, you are called a beneficiary. A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive.

If you inherit a traditional IRA from a spouse, you generally have the following three choices:

Treat it as your own by designating yourself as the account owner.
Treat it as your own by rolling it over into your IRA.
Treat yourself as the beneficiary rather than treating the IRA as your own.

Note: If you receive a distribution from your deceased spouse’s IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution.

Please contact one of our IRA Experts at 800-472-0646 for more information.