My mother will be inheriting a ~$25K 401K from my brothers estate.
Originally got the wrong paperwork from the administrator, but finally have the right forms.
"I am so sorry but some of the information I gave to you was false. This was my first time working on a non-spouse beneficiary distribution and I did not realize that non-spouse beneficiaries can not rollover into an individual IRA. If your mother has an inherited IRA then she can rollover into that. If she does not have an inherited IRA, her only option is to receive it as a lump sum. I have attached the form and I have also attached a tax notice for your viewing."
Which is not something I was ready for. Anyone have experience? The primary beneficiary was his Ex-Wife, but that was cancelled by their divorce. He had mom as his contingent beneficiary so we were able to keep it out of the estate(good because of possible outstanding medical debt).
Looking at a few articles, and it appears she can likely take it all as a distribution, spread it out over 5 years, or spread it out as RMD's for her life expectancy. Anyone have experience/expertise? Just want to be sure I understand the options before I talk it over with her. She's 62 and currently working.
