What happens to an inherited IRA if a beneficiary dies?

Consider working with a financial advisor about estate planning. An inherited IRA is one that has been left to a beneficiary following the death of the original account holder. The beneficiary, or the person who inherits the IRA, can then potentially pass this on to a successor beneficiary upon his or her death.

What is an inherited IRA?

An inherited IRA is one that has been left to a beneficiary following the death of the original account holder. The beneficiary, or the person who inherits the IRA, can then potentially pass this on to a successor beneficiary upon his or her death. This creates the scenario of inheriting an inherited IRA.

Can an heir inherit an IRA?

An heir will typically have to move assets from the original owner’s account to a newly opened IRA in the heir’s name. For this reason, an inherited IRA may also be called a beneficiary IRA. Anyone can inherit an IRA, but the rules on how you must treat it differ depending on whether you’re the spouse of the original owner or someone else entirely.