An Inherited Individual Retirement Account (IRA) is a tax-advantaged savings account funded with retirement savings inherited from a deceased individual.
Federal tax laws require that an inherited account owner distribute the entire account within a certain amount of time. An inherited IRA allows you to leave the assets in the IRA to grow tax-deferred for as long as the rules permit. The length of time varies according to the beneficiary’s relationship with the original account owner (spouse, non-spouse, legal entity) and age of the original account owner. Inherited IRAs cannot be combined with other personal IRAs.