Inherited Roth IRAs

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
• Pages: 133-133

133

INHERITED ROTH IRAS

One of the advantages of a Roth IRA is the fact that the Roth IRA owner

is not subject to the required minimum distributions rules during his /

her lifetime.

Upon the Roth IRA owner’s death, a nonspouse beneficiary must

commence required minimum distributions in the year following the

Roth IRA owner’s year of death.

The nonspouse beneficiary must receive required minimum distri-

butions from the inherited Roth IRA based on his / her term- certain life

expectancy.

The nonspouse beneficiary determines his / her term- certain life ex-

pectancy based on his / her age as determined under the IRS single life

expectancy table in the year after the Roth IRA owner’s year of death.

The inherited Roth IRA must be maintained in the deceased Roth

IRA owner’s name for the benefit of the nonspouse beneficiary. The So-

cial Security number of the nonspouse beneficiary must be used on the

inherited Roth IRA account.

If there are multiple nonspouse beneficiaries of the decedent’s Roth

IRA and each nonspouse beneficiary would like to use his / her respective

life expectancy in determining required minimum distributions from

his / her share of the decedent’s Roth IRA, then the decedent’s Roth IRA

must be timely separated by means of a direct transfer by no later than

December 31 of the year following the Roth IRA owner’s year of death.

If the timely separation of the inherited Roth IRA does not take

place, by the December 31 deadline, then special rules apply.

In the event that the nonspouse beneficiaries divide the decedent’s

Roth IRA by means of a direct transfer after the December 31 deadline,

then each nonspouse beneficiary must use the IRS single life expectancy

of the oldest nonspouse beneficiary as determined in the calendar year

after the Roth IRA owner’s year of death for required minimum distri-

bution purposes.

If there are multiple nonspouse beneficiaries of an inherited Roth

IRA, then the inherited Roth IRA for each nonspouse beneficiary can

only be established by means of a direct transfer.