How Do I Title a Beneficiary IRA?

If you are the spouse of the deceased IRA owner, you can treat the IRA as your own by renaming it in your name. Essentially, you can take over the IRA by renaming it as your own. The custodian of your IRA should have a record of you as the named beneficiary of the original owner. Provide a copy of the death certificate to your financial institution, along with your own written instructions for how you want to rename the account, and the administrative part of the transfer should be fairly easy.

If you already have an IRA account in your name, you can transfer the decedent's IRA into your existing one. This is another option only available to surviving spouses. It can be an easier solution than renaming the original IRA and ending up with two of your own. Provide the IRA custodian with a copy of the death certificate and your written instructions. You will also have to provide information on your existing IRA, such as the account name, account number and transfer information on your IRA custodian.

Categorizing yourself as a beneficiary of the IRA is the only option available to non-spousal beneficiaries. In this scenario, you must rename the account in a manner which clearly shows you are the beneficiary of the original owner and that you aren't the original owner of the IRA. Although there isn't a strictly mandated format, the typical procedure if you inherit an IRA would be to title the IRA with the name of the decedent, followed by your name as beneficiary. For example, "John Smith IRA Deceased May 29, 2011 FBO Mary Jones as beneficiary" would be an acceptable format, as it lists the original deceased account owner, the date of death and the name of the beneficiary, identified as such. "FBO" stands for "for the benefit of" and is standard industry lingo on account titles.

As the beneficiary of an inherited IRA, you must begin taking annual distributions from the account no later than Dec. 31 of the year after the account owner dies. The Internal Revenue Service publishes life expectancy tables in IRS Publication 590 to help you determine the required amount of your distribution, which is generally based on your life expectancy. If the original owner had already begun taking required minimum distributions after reaching age 70 1/2, you must choose the longer of your life expectancy or that of the deceased owner for distribution purposes. These rules don't apply to spousal beneficiaries. As a spousal beneficiary, your inherited account is now your own, so you don't have to take any distributions until the IRS requires you to after age 70 1/2.