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My wife (age 31) was recently willed a small 401k. We could:
1) do nothing, let it accumulate tax deferred
2) transfer it to her name, let it accumulate tax deferred
3) withdraw it to build a summer home

I'd like some good advice what to do. OK, before you start, I am not giving it to you or your favorite charity. Also, we already have large retirement account - I've been contributing into a 401k since I was 23. And we have several rental properties and a little after tax money in the stock market.

Do she need to start taking Minimum Required Withdraws by Dec of the year following the death?
Why should she transfer it into her name?
If we withdraw it, I think I'd do it half this year and half in Jan '07, for regular income tax purposes. (Last year, because of smart tax planning, I paid $84 total in federal taxes.)

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