It used to be that only spouses could rollover an inherited 401k into their own IRA. Children or others who inherited such plans had to withdraw and pay taxes on the money often within a very short time. Some plans even required immediate withdrawl; most plans required withdrawal in a year to five years. Legislation was just signed into law which provides that 401(k)s and other company sponsored plans can be transfered by any heir directly into an IRA and withdrawn over the heir's life expectancy. You have to do it right. You form what is called an inherited IRA, you don't roll it over into existing IRAs.
This effects far more people than estate taxes and is an important development.
http://www.kiplinger.com/personalfinance/features/archives/2006/08/pensionbill2.html
Today's WSJ also has an article on the new law.
This effects far more people than estate taxes and is an important development.
http://www.kiplinger.com/personalfinance/features/archives/2006/08/pensionbill2.html
Today's WSJ also has an article on the new law.