What are the rules for an IRA beneficiary?
A spouse that inherits an individual retirement account can roll it over into their own account or retitle the account as an inherited account. The rollover option is not available to non-spouse beneficiaries.
Distributions to a Roth individual retirement account beneficiary are not taxable, but traditional account distributions are taxable income. Beneficiaries of both types of accounts are required to take minimum distributions.
Prior to the enactment of the first SECURE Act, a beneficiary could take only the minimum that was required by law for any length of time. This is called “stretching an IRA,” and it was especially effective for beneficiaries of Roth IRAs that were very well-funded.
They could take advantage of the tax benefits for the maximum length of time, but this changed when the SECURE Act was enacted. Now, all the assets must be withdrawn from either type of account within 10 years of the time of acquisition.