Are beneficiaries required to withdraw money from a Roth IRA?
Yes. Even though there are no required lifetime distributions for the owner of a Roth IRA, the beneficiary (other than a spouse) must take distributions over his lifetime. Depending on the beneficiary’s age and the investment yield, it may be possible for the account to continue to build for years to come even though annual distributions are taken. Caution: You must start taking these required distributions no later than December 31 of the year following the year of the owner’s death. If you miss this deadline, then you’re deemed to have elected the five-year rule, requiring you to take the entire IRA by the last day of the fifth year following the year of death. Trap: In order for the entire balance of the Roth IRA to be tax free, the account has to have been held for at least five years. Does a beneficiary have absolute control over the form of an inherited IRA? A spouse-beneficiary can, of course, change the title to the account and treat it as his own without any immediate tax cons
