Inheriting

Inheriting an IRA

If you get an inheritance from your spouse, parents, or other generous benefactor, chances are that some, or even all, of that inheritance will be in the form of an IRA. Many people are opting for IRAs, especially retirees who often roll over their 401(k) upon retiring. The rules for accepting an inherited IRA are different than for inherited cash. Your options depend on what type of IRA (Roth or Traditional), who’s giving it to you (spouse or non-spouse), and how old the benefactor was. It’s easy for a simple misstep to lead to a large tax bill, so tread carefully when inheriting an IRA.