A spouse beneficiary can assume ownership and avoid RMDs. However a non spouse beneficiary is subject to RMDs using their remaining life expectancy. The first RMD is due by 12/31 following the year of owner’s death.

With respect to taxes, the original 5 year holding period continues to run after the owner’s death. Once the total reaches 5 years, the entire account is tax free. Even if a non spouse beneficiary takes an RMD or other distribution prior to the end of the 5 year period, that distribution is applied first to regular contributions and next to conversions. Since only the earnings would be taxable, by the time the beneficiary reached earnings, the 5 year period would likely have been reached. Therefore, only if the beneficiary drains the Roth right away would there be any taxes due, and then only on the earnings. Of course, the beneficiary would need access to the records of the owner in order to determine the amount of contributions made and probably the year the owner first contributed to any Roth IRA.

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