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Introduction to Inherited Traditional and ROTH IRAs

Rules around Inherited Traditional and ROTH IRAs can be quite complex. The purpose of this tool is to walk you through the general options available to a:

  • Spouse
  • Non-spouse beneficiary
  • Trust
  • Estate

Important points to keep in mind:

a) If you inherit an IRA or employer-sponsored plan, you are required to take distributions. Spouses have additional options.

b) Slightly different distribution tables exist for spouse vs. non-spouse beneficiaries.

c) To minimize the tax consequences stretch these distributions over as many years as possible.

d) Failing to take distributions may result in a 50% tax penalty.


NOTE:  Employer-sponsored plans often have rules unique to the plan. Please consult with the plan sponsor for a comprehensive list of options.


THIS DECISION TREE IS MEANT TO PROVIDE GENERAL GUIDANCE, NOT NUANCES OF THE LAW.  CONSIDER CONSULTING A TAX ADVISER OR ATTORNEY--PARTICULARLY IN COMPLEX SCENARIOS.


Inherited IRAs Decision Tree

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