You also have the option of distributing your inherited IRA under the 5-year rule. This allows you to take distributions however you like without penalty, so long as all assets are completely distributed from your inherited IRA by December 31 of the 5th year following the IRA owner’s death.

How should inherited IRA be titled?

Titling Basics A beneficiary IRA must be titled in the decedent’s name for the benefit of the beneficiary. However, there’s not a single, specific format for the name. For example, say you inherited an IRA from your brother, Jonathan Jones, and your name is Kenneth Jones.

How do I find the beneficiary of my IRA?

Account Manager. If you can’t find the beneficiary form but you know which brokerage handles the IRA, call the account manager. If you’re the beneficiary, and if you present proof of your brother’s death, the manager will tell you if you’re on the account.

How long do I have to decide what to do with an inherited IRA?

You can choose to take distributions over your life expectancy, known as the “stretch option,” which leaves the funds in the IRA for as long as possible. Otherwise, you must liquidate the account within five years of the original owner’s death.

What are the rules for inheriting an IRA?

If you inherit an IRA from your spouse, it can have all the same distribution rules as your own personal IRA, but an IRA inherited from someone other than your spouse may have other distribution rules and policies. IRAs and inherited IRAs are tax-deferred accounts.

Can a inherited IRA account be combined with an inherited account?

The IRA inherited by Phyllis is using Phyllis’ life expectancy. So, even though both accounts came from Jim, the RMD calculations are being done differently and the inherited accounts cannot be combined.

How is the distribution of an inherited IRA determined?

Your annual distributions are spread over your single life expectancy, which is determined by your age in the calendar year following the year of death and reevaluated each year.

How are RMD’s calculated for an inherited IRA?

The IRA inherited by Mike is calculating RMDs based on Mike’s life expectancy. The IRA inherited by Phyllis is using Phyllis’ life expectancy. So, even though both accounts came from Jim, the RMD calculations are being done differently and the inherited accounts cannot be combined.