It depends. If the beneficiary of your IRA is your spouse, he or she will be eligible to transfer the amount to his or her own IRA, from which distributions are not required until age 70.5.

If the beneficiary is not your spouse, then the options available may be determined by the provisions in the IRA plan document. Most IRA custodians follow the regulations and will allow beneficiaries to take distributions over their life expectancies. Under this life-expectancy method, beneficiaries are required to withdraw only a certain amount each year. But since IRA custodians are not required to follow the guidelines set in the regulations, some IRA custodians require beneficiaries to take a lump-sum distribution after the death of the IRA owner. You should check with your current IRA custodian immediately to determine the options it allows for your IRA beneficiaries. If the options are not consistent with your estate-planning goals, then you may want to consider transferring the IRA to an IRA custodian that provides the options you find acceptable.

See Inherited Retirement Plan Assets - Part One: Options for Beneficiaries and Inherited Retirement Plan Assets - Part Two: Important Dates for Beneficiaries for information on beneficiary options and calculating the minimum amounts that should be withdrawn each year under the life expectancy method.

This question was answered by Denise Appleby
(Contact Denise)

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