Inherited IRA

An inherited IRA is an account that is opened when an individual inherits an IRA or employer-sponsored retirement plan after the original owner dies. The individual inheriting the IRA may be anyone — a spouse, relative, or unrelated party or entity (estate or trust).

Rules on how to handle an inherited IRA differ for spouses and non-spouses, however. An inherited IRA is also known as a "beneficiary IRA."