Nonspouse beneficiary rollover rules

[TaxGal]

Can someone please clarify the new law as it pertains to nonspouse beneficiary distributions from a 401k after 2006?

[jainen]

gives you more time

>>nonspouse beneficiary distributions from a 401k<<

Now you can roll it over to an IRA (trustee-to-trustee only). From one IRA to another is not that big a deal because it's still called an inherited account and is subject to the same distribution rules. But sometimes a qualified plan requires the heirs to close the account immediately. The new rule gives you more time to figure out what to do with the retirement money.