Surviving spouses have several decisions to consider when inheriting IRAs. If a surviving spouse under the age of 59 ½ is the beneficiary of an IRA, he or she should consider placing the funds into an inherited IRA, allowing the beneficiary to take distributions from the account with no requirements. If the beneficiary wishes to roll over the inherited IRA into a personal IRA, the beneficiary must keep records and be restricted on the amount withdrawn for a minimum of five years. Additionally, there are limitations for taking distributions for which a 10% penalty will apply.
See Dan Moisand, When Inheriting an IRA, You Need to Weigh Your Options, Market Watch, August 12, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
