When funds must be removed from an individual retirement arrangement depends on the age of the owner when he died and who inherited the IRA, states the Internal Revenue Service. A designated beneficiary must begin withdrawals by Dec. 31 of the year after the death, says attorney Robert Clofine.
A designated beneficiary may take withdrawals based on his life expectancy if the owner was under the required minimum distribution age or based on the life expectancy of the younger of the beneficiary or the owner if the owner was over the RMD, says the IRS. If no beneficiary was designated and the owner was under the RMD, all funds must be withdrawn within five years. If the owner was over the RMD, yearly withdrawals are based on the owner's age.
A spouse may treat the IRA as her own or use one of the above options, states the IRS.