1. Transfer the money to your own account
- If you inherit from your spouse, you can transfer the money into your own retirement account.
2. Transfer the money to an inherited IRA
- If you are not a spouse, this is the typical way. Funds are rolled into an Inherited IRA with many of the same rules as a normal IRA applying.
3. Take all the money now
- If you need the money now, this may work. Taking a lump-sum will be very tax in-efficient!
4. Choose not to take the money
- You can opt to not take funds (maybe for tax reasons), which would pass the funds to the alternative beneficiary.
- You need to do this within 9 months of the original account owners’ death
- You must have not taken claim of the assets prior
Emergency Planning
If you believe your financial situation may be tough or become tougher, transferring assets may take a different course. Funds going into your own account have restrictions until you are 59.5 but funds in an inherited IRA do not! It is better to roll funds into an Inherited IRA, with the optionality of withdrawing early.
