When handling an inherited IRA, you should be extremely cautious.
The Slott Report considered this matter in a recent article titled “Moving Inherited IRA Money? Be Careful.”
For starters, you cannot move an inherited IRA into your own IRA if you are a non-spouse beneficiary. What if the financial institution where the account is held charges too much, or another institution has better investment options? How do you move the inherited non-spousal IRA?
In a direct IRA transfer the first bank cuts the check to the second bank, for your “benefit,” but NOT in your name.
If the distribution check is made payable to you in your name, tax deferral advantage of the IRA will be lost - and taxes will be due. Moreover, the receiving IRA has to be of the same kind of IRA as the distributing account (i.e., from a traditional IRA to traditional IRA, or from Roth to Roth).
For more information about inherited IRA's in Miami, Florida, please visit my estate planning Web site.