Surviving spouses are the only beneficiaries who can roll over a deceased spouses IRA into their own IRA, but this might not always be the best option. Whether rolling over an IRA is a good idea will depend on the circumstances. It is important to remember “that if you roll it into your own IRA, it is treated as if it were always yours. If you are under age 59½ and roll the money into your IRA, you will have the 10% early distribution penalty to contend with should you want any cash.” There are circumstances when it might be better to just leave the money in the inherited IRA. It is a good idea to speak with an experienced estate planning professional about whether rolling over an IRA is a good decision.
See Dan Moisand, Spouses have special powers when inheriting IRAs, Market Watch, April 22, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
