My comments were regarding a 401K that may eventually be inherited by our children. The administrator of my company 401K is Fidelity. In a phone conversation I had with them, I was advised that my husband as the primary beneficiary would inherit the money and not have to "cash in" any moneys and pay tax consequences. However, when my husband passes, or we should both pass at the same time, my children could not keep the 401K but would be required to cash it in within a certain period of time.
To avoid this problem, the funds should be moved to an inherited IRA, also known as a stretch IRA or multi-generational IRA.
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