Inherited IRAs can be handled in a few different ways, depending on the beneficiaries relationship to the deceased IRA account holder. There are three types of beneficiaries: spouse, non-spouse or non-person beneficiary. Spouse is pretty self-explanatory. A non-spouse would be anyone other than a spouse and a non-person beneficiary would be a family trust, estate, charity, etc.

If you are a spouse beneficiary, you will have the following options:

• Treat IRA as your own
• Five-year rule (must take out the entire balance of IRA within five years)
• Single life expectancy (take funds out over your life expectancy based on the IRS life expectancy table)
• Distribute as lump sum

If you are a non-spouse beneficiary, you will have the following options:

• Five-year rule
• Single life expectancy
• Distribute as lump sum

For non-person beneficiaries, they will have the following option:

Five-year rule