Are you expecting to inherit an IRA account from a parent or spouse? According to a recent article on the AARP website, there are some things you should know before you cash in the account.
The spouse inherits:
In the case of a husband or wife getting the IRA when the spouse dies, the funds can be transferred to his or her account. Another alternative is to retitle the IRA. That involves having the account retitled as “Bill Smith IRA (deceased Aug. 1, 2012) for the benefit of Lisa Smith, beneficiary.” Only then, can Lisa start taking money, penalty-free. Yet, once Lisa turns 59½ , she has to retitle the account in her name. Doing that allows her to defer withdrawals until she turns 70½.