Can I Move an Inherited IRA to Another Company

You've inherited an IRA, and now you're wondering if you can move it to another company. The good news is that you can, but there are some rules to follow.

The key is to understand the different types of IRAs and their rules. For example, if you inherited a traditional IRA, you can move it to another company, but you'll need to follow the five-year rule. This means that you'll need to wait five years from the date of the original account holder's death before you can take distributions.

If you inherited a Roth IRA, the rules are a bit different. You can move it to another company, but you'll need to follow the same rules as the original account holder. This means that you'll need to be at least 59 1/2 years old or have a qualified distribution to avoid penalties.

You can inherit an IRA from anyone, including traditional and Roth IRAs, SEP IRAs, and SIMPLE IRAs. The income tax treatment remains the same from the original account to the inherited IRA.

Inherited IRAs can be complex, with different rules for different situations. If you're the spouse of the original owner, you have one set of choices, but if you're a minor child, chronically ill or disabled, or not more than 10 years younger than the original owner, you have another set of choices.

The original account owner's required minimum distributions (RMDs) can also affect what you can do with the IRA. Some experts advise beneficiaries to meet with a financial advisor before making any decisions.

You can take a lump-sum distribution to receive the inherited assets as cash, but it's a good idea to speak with a tax professional to understand your potential tax consequences.

Here are some common options for inheriting an IRA:

It's essential to consider your options carefully and seek professional advice before making any decisions about your inherited IRA.

You can inherit an IRA from anyone, including traditional and Roth IRAs, SEP IRAs, and SIMPLE IRAs. The income tax treatment of the IRA remains the same from the original account to the inherited IRA.

If you're the spouse of the original owner, you have one set of choices. If you're a minor child, chronically ill, or disabled, or not more than 10 years younger than the original owner, you have another set of choices. But everyone else has a still-different set of options.

The SECURE Act shook up long-standing practices, creating more confusion about inherited IRA rules. Some experts advise IRA beneficiaries to do nothing until they've met with a financial advisor who can explain their options.

Here are some key things to know about inherited IRA rules:

The SECURE Act also introduced a 10-year rule, which requires non-spousal beneficiaries to empty the entire account within 10 years of the original account holder's death. This rule applies to IRAs whose original owners died after December 31, 2019.

Related reading: Inherited Ira 10-year Rule Example

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If you've recently inherited an IRA, you can find yourself at the tricky three-way intersection of estate planning, financial planning, and tax planning. One wrong decision can lead to expensive consequences, and good luck trying to persuade the IRS to give you a do-over.

Here are some key principles and rules to keep in mind:

The SECURE Act, signed into law on Dec. 20, 2019, eliminated the rules that had permitted the stretch IRA strategy for lifelong sheltering of distributions from IRA accounts for any non-spouse who inherits a retirement account from someone who died after Dec. 31, 2019.

Moving an inherited IRA can be a straightforward process, but it's essential to understand your options. You can assume ownership of the account by designating yourself as the owner of the existing account.

You can roll the inherited assets into an existing IRA in your name, as long as the inherited assets are taxed the same as the account you're rolling into. If you don't have an existing IRA, you can set up a new account in your name to roll the inherited assets into.

Here are your options for moving an inherited IRA:

To move an inherited IRA, you'll need to gather some essential information from the current account statement. This should include the account number, account type (such as Individual or Joint), and the name, phone number, and address of the company where the account is currently held, also known as the current custodian.

You can find this information on a recent statement of the account you're moving. Make sure to take note of the account number, as you'll need it to complete the transfer process.

A recent account statement should also indicate the account type, such as Individual, Joint, or IRA. This is important because different account types have different rules and requirements for transferring assets.

To ensure a smooth transfer, it's crucial to have the current custodian's contact information handy. This will allow you to reach out to them if any issues arise during the transfer process.

Here's a summary of the key information you'll need to gather:

Spousal beneficiaries of an inherited IRA can take over the account and manage it as if it were their own, including calculating required minimum distributions (RMDs).

If you're a spousal beneficiary, you can move the assets into your name in one of four ways: by designating yourself as the owner of the existing account, rolling the assets into an existing IRA in your name, setting up a new account in your name, or taking a lump-sum distribution.

Non-spousal beneficiaries, on the other hand, are required to take distributions from the total account within 10 years of the death of the original account holder.

You can move the inherited IRA assets into an inherited IRA account, but it's essential to work with a custodian that understands the complex rules surrounding these accounts.

Here are the key differences between spousal and non-spousal beneficiaries: