Salient to Investors:

Anyone holding an IRA or 401(k) should leave a note explaining the importance of retitling if you want your heirs to get as much tax deferral as they can from the money you leave them. The best strategy for heirs is to leave as much money as possible in the inherited IRA account.
If you are under 59-1/2, you can avoid the 10% withdrawal penalty by retitling the account as an “inherited IRA – for example “John Jones IRA (deceased Aug. 1, 2012) for the benefit of Mary Jones, beneficiary.”
When you reach 59-1/2, retitle the account again in your name alone: which defers any further withdrawals until you reach 70-1/2. Otherwise withdrawals must start when the late spouse would have reached 70-1/2. 
For inheritors who are not spouses, each retitles their account share as an “inherited IRA.” For example, say John Jones leaves his IRA to his daughter, Joan.
If you inherit a 401(k), retitle it as an inherited IRA. Correct titling is critical,  

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