Eve’s husband, Adam, has died, leaving various retirement accounts to her as beneficiary. She knows these are tax-sensitive assets and does not want to make a mistake. She seeks your advice: What should she do with these assets?
Here is a checklist of potential tax issues and elections Eve faces regarding the retirement accounts she has inherited from Adam.
For most surviving spouses in most situations, the best course of action is to “roll over” or transfer, to the surviving spouse’s own IRA, any account inherited from the deceased spouse, so we’ll review the steps for carrying out that process. But before getting to what “most” spouses do, let’s look at the exceptions: Does Eve have any of the following circumstances that might suggest not doing a spousal rollover of the inherited benefits, or at least not doing it yet?