You can't contribute new money to a legacy IRA, and you probably only have 10 years to empty the account. The general rule for beneficiaries other than their spouse is that they must withdraw all the money from the account by December 31 of the tenth year after the death of the original owner. Generally, distributions from inherited Roth IRAs do not increase your taxes as long as the deceased has maintained the Roth account for at least five years. A beneficiary spouse, unlike a beneficiary other than their spouse, can continue to use the old rules of the Pre-Insurance Act, either extending the account's RMDs throughout their life or, alternatively, transferring the inherited IRA to their own IRA, McGovern said.
You'll need to pay taxes on withdrawals from your inherited IRA if the funds in the original IRA account are classified as tax-deferred. The original owner of a Roth IRA never has to accept RMD, but those who inherit a Roth IRA do, unless they fall into one of the categories of exceptions. A spouse has almost unlimited options, such as treating an inherited IRA as their own, even to the point of converting it to a Roth one. Roth IRA owners don't need to accept RMDs throughout their lives, but beneficiaries who inherit Roth IRAs must accept RMD.
If you inherit a Roth IRA, it's completely tax-free if the Roth IRA was held for at least five years, starting on January 1.