Inheriting an IRA? Know the rules.

Understanding inheritance rules is critical—you don't want to pay high taxes or penalties.

There is no denying that IRAs have helped improve retirement security for millions. Without proper planning, however, a portion of these hard-earned savings may be eaten up by taxes and penalties when an IRA owner dies. If you are the relative, loved one, or close friend of an IRA owner who has named you as their beneficiary, it's critical that you—and the owner of the IRA—understand the rules that govern IRA inheritances.

Surviving spouse of an IRA owner

Options:

  • Take any required distributions from the existing account
  • Roll over the assets into a new or existing IRA in your own name.
  • Transfer the assets into a new "Inherited" IRA
  • Disclaim all or a portion of the assets in favor of any contingent beneficiaries

Non-spouse beneficiary

Options:

  • Take any required distributions from the existing account
  • Transfer the assets into a new "Inherited" IRA
  • Disclaim all or a portion of the assets in favor of any contingent beneficiaries
The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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