Can an IRA beneficiary roll the IRA over into another account and designate another beneficiary?
It depends on the provision of the IRA plan document. Some (though very few) do not allow the designation of successor beneficiaries. The good news is that most do. If the beneficiary designates a successor (second generation) beneficiary, the successor beneficiary must continue distributions based on the first-generation beneficiary's life expectancy. An exception applies to a spouse beneficiary who elects to treat the IRA as his or her own; this spouse beneficiary would use the rules that apply to the IRA "owner" - not the beneficiary.
By the way, when you communicate with your financial institution regarding the matter, you may want to use the term transfer instead of rollover, just to make sure that the transaction is done properly. As you may know, once a beneficiary takes a distribution of inherited retirement (including IRA) assets, that amount cannot be rolled over unless the beneficiary is the spouse of the deceased retirement account owner. With a transfer, the assets are delivered directly to the financial institution for credit to the inherited IRA. The beneficiary must not take possession of the assets if he or she wants to keep them in an IRA.
To read more, check out Moving Plan Assets: How To Avoid Mistakes.
This question was answered by Denise Appleby