A. IRA accounts can be rolled over to a spouse with no immediate income taxation to the decedent, the estate, nor to the spousal beneficiary. If there is no surviving spouse, or when the surviving spouse dies still owning the IRA assets, typically the IRA is highly taxed. Combined income and estate federal tax rates of 65 %, and more, are not uncommon in such situations. State taxes add to this tax burden. First, the IRA is taxed as part of your federal gross estate, whether the named beneficiary of the IRA is the estate, or any non-spousal beneficiary. In addition, the IRA is taxed again as ordinary income to the ultimate beneficiary as distributions are received. Of course, the IRS has rules forcing these beneficiaries to take taxable distributions within a certain time frame beginning with their inheritance of the IRA. Given the unique opportunities available for minimizing both the Estate and Income taxes otherwise due upon the death and subsequent distribution of an individual's IRA, as well as the devastating results of a failure to properly plan and document your intentions, a review session with a qualified financial professional can resolve this matter in your favor.

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