As I have previously discussed, an inherited IRA can provide numerous benefits to the beneficiaries that receive the IRA. Additionally, beneficiaries who inherit Roth IRAs and 401k accounts can receive many of the same benefits. The beneficiary or an appropriate trust can stretch an inheritance over the life expectancy of that beneficiary. This allows a taxpayer to take advantage of the tax benefits from a 401k that he can receive from stretching out an IRA. However, there are certain 401ks that do not allow this practice. Furthermore, this does not apply to Roth IRAs because their distributions are already tax free.
See Kelly Greene, Inherited Retirement Accounts: More Sweet Deals, The Wall Street Journal, Apr. 17, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
