<prompt> Human: My husband Aaron and his brother Paul were recently notified that they are the beneficiaries of an IRA belonging to their father Frank, who passed away in 2013. The account has about 20,000 in it, so they will each receive 10,000. They have the option of taking a distribution of around 800 every year or cashing out in a lump sum. Paul is cashing out immediately. We are trying to figure out how to handle Aarons share. Some questions:- Since one beneficiary is cashing out his share, does that mean the other one has to as well?- Could Aaron roll over his entire share into his own IRA without paying taxes on it? The account is with Capital One. His IRA is with TIAA-CREF.- Should we cash out, pay taxes now, and open a Roth IRA? Or should we do that with the 800 every year? Is that a better or worse option than rolling over to a traditional IRA? Or our kids 529 -- would it be better off in there?- Big picture, what is the smartest thing to do here? Are there other factors Im not considering?One final consideration is that taking the whole 10,000 this year may put us in the next tax bracket, depending on how some other things turn out. But if thats the necessary outcome, because of Paul or any other reason, we still want to make the savviest decision that we can.  <response>: Roll it over to an inherited IRA - theres no benefit in keeping it where it is. The smartest thing to do is treat it like you just put 10,000 more into retirement and leave it at that. If youre already saving 15 towards retirement, then you could use this lump sum to deflect a little more of your own money towards the 529 this year.As a side note, what you say about tax brackets makes me think you dont fully understand how our marginal tax rates work. If you search for that term on google, you will find a lot of information to help you out. In short: moving to the next bracket does not increase the taxes on money youve already earned. Anything you earn below that bracket is taxed at one rate and anything above is taxed at another higher rate. 