Inheriting a Roth IRA

Here is some advice for handling an inherited Roth IRA, taken from Kelly Greene, The Gift That Keeps on Giving: A Roth IRA, WSJ, Oct. 24, 2009.

• Inheriting a spouse’s IRA: You can roll the IRA into your own IRA, avoiding required distributions and receiving credit for the time the IRA was held by your spouse for purposes of withdrawing principal.
• Inheriting a parent’s IRA: When children are the beneficiaries of the same IRA, they can split the IRA.
• Titling an inherited IRA: The Internal Revenue Service recognizes this format for retitling the IRA, “‘The parent’s name Roth IRA/ Deceased 1/1/2001/ FBO (for the benefit of) Name of child as beneficiary.'”

Special thanks to Patrick S. Sylvester (Attorney & Counselor at Law, Sylvester Law Firm, PC) for bringing this article to my attention.