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.