The first instinct of a person who just inherited money is to take the entire amount under control and withdraw it from any retirement plan it might have been in. However, simply taking the entire corpus is not always a wise move depending on the circumstances. Surviving spouses can easily roll over an IRA from the deceased spouse but many do not opt to keep the money invested and tax free. It is also little known that an IRA can continue after the death of the owner as long as the required minimum distributions are made. As more Baby Boomers go to the grave, the post death options of retirement plans will grow in importance. Heirs should be given the best available facts to decide if keeping the money in the plan or taking it all out is the best option in any particular scenario.
See Michael J.Jones, Retirement Account Death Benefits, Wealth Management, July 13, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
