Inherited IRAs ~ Understanding the Rules
You may think when you receive a bequest of an IRA from a parent or a partner it becomes your IRA. It does, in a way. Your name is on the IRA and the money is yours except, the deceased name is also on the IRA. This means you have to follow special rules about taking this money from the IRA . When you are not a spouse (in the eyes of the federal government), the IRA account must be transferred to the same or another investment company titled as above.
You have to take the money out each year, based on your life expectancy. If the age of the original owner of the IRA was 70 1/2 before death, you have to take the money out on the schedule of the deceased.
If you are a spouse, you are able to move the IRA to your own IRA. In most cases, you can’t take the money out without penalty until you are 59 1/2.