Individual Retirement Accounts, or IRAs, are treated very much like other financial assets that are inherited after a person dies. IRAs are most often inherited by spouses of the deceased, but they can also be passed on to anyone designated as the beneficiary. If you inherit an IRA, you can do whatever you choose with it, including holding on to it, rolling the IRA money into another account or cashing it out.
Things You'll Need
- Death certificate
- Bank account number
Consult a tax accountant to determine the tax implications of cashing out the IRA. The accountant can calculate any taxes and penalties that may result.
Contact the company that administers the IRA, notify it of the original IRA owner's death and present a death certificate. The financial institution will verify the death certificate and transfer the IRA money into an inherited retirement plan account in the beneficiary's name.
Notify the financial institution that you want to cash out the IRA. This can usually be done easily online, but you can also call the company.
Decide how you want to receive the money. Most financial institutions will send a check in the mail, and many will also transfer the money into a bank account. For the latter, you'll need to provide the bank account number when you contact the institution to cash out the IRA.