Someone close to you has died and left you money from an individual retirement account. Planning for this should be easy, right? Wrong.
The rules for inherited IRAs are complicated. Recipients are susceptible to making egregious mistakes when handling these accounts, which are subject to different rules than your own traditional IRA.
By comparison, those who inherit IRAs via a spouse have more choices, according to the IRS. For example, they can treat the inherited IRA as their own and add their name to it as the account owner. They could also roll it over into another traditional IRA. Or, they can consider themselves a beneficiary.