Inheriting an IRA means that different rules apply to various circumstances as in the case of a spouse versus non-spousal beneficiaries. Regardless of who is inheriting the IRA, the heir must take the RMD (required minimum distribution) for the year the account owner died. The full RMD must be withdrawn by December 31 of the year the account owner died, even if he or she died at the beginning of the year. Beneficiaries must contact the custodian of the account and submit a death certificate. If the account owner died before he or she was required to begin distributions, then the beneficiaries do not need to take an RMD.
Naturally, the next two questions are 1) where does the distribution go when it is taken out and 2) what are the tax implications for the heir are.
Death isn’t the End of Your Retirement Account
This article is for informational purposes only and shall not be construed as legal advice. No attorney-client relationship between the reader and Brennan & Rogers, PLLC, or its attorneys is intended. This article should not be used as a substitute for legal advice. Laws may vary from state to state, and the educational materials found in this article may not apply in all jurisdictions.
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