What Spouses and Nonspouses Need to Know
A spouse who is inheriting IRAs has the advantage of being able to transfer retirement accounts she’s inherited without owing estate taxes or any more income tax than her late spouse would have owed on the account. This doesn’t mean that she should take advantage of this rule without careful planning. Disclaiming the inheritance so that the accounts can pass to contingent beneficiaries like the children could be a better option in the long term.
A nonspouse beneficiary needs to carefully consider her own financial plan and the tax ramifications of bringing her inheritance into her own retirement nest egg.
Whether you have a carefully thought-out estate and retirement plan or this is your first look ...