A parent dies. An adult child inherits a traditional IRA and assumes the account can be stretched over a lifetime, the way a neighbor did a decade ago. For deaths after December 31, 2019, that stretch is gone for most non-spouse heirs.
The SECURE Act generally requires those heirs to empty the inherited IRA by December 31 of the year that contains the tenth anniversary of the owner’s death. If the original owner had already reached the age when lifetime required minimum distributions (RMDs) begin, the heir may also owe an annual RMD in years one through nine.
This article is education for families in Connecticut and nationwide. It is not tax advice for a specific inherited account and not a recommendation to take any particular withdrawal. Confirm the date of death, beneficiary type, and custodian records with a CPA and the IRS tables in Publication 590-B.
What is the inherited IRA 10-year rule?
Before 2020, many families used a “stretch IRA.” A 50-year-old child could take small required amounts over their own life expectancy. The rest stayed invested on a tax-deferred basis. That was a powerful way to leave money to the next generation.
For IRA owners who died after December 31, 2019, most named individuals who are not eligible designated beneficiaries must empty the inherited IRA by December 31 of the year that includes the tenth anniversary of death.
Example: the owner dies in 2024. The account generally must be empty by December 31, 2034. The clock is ten calendar years after the year of death, not ten years from the funeral.
That 10-year rule is not optional for a typical adult son or daughter.
Who is an eligible designated beneficiary?
A short list of heirs may still take lifetime, life-expectancy payments instead of emptying the account in ten years. Status is measured on the date the owner died.
1. Surviving spouse. A spouse has options the children do not, including treating the IRA as their own.
2. Minor child of the owner. Biological or legally adopted — not a grandchild. When that child reaches the age of majority for this rule (generally 21), the stretch stops and a new 10-year clock starts.
3. A disabled individual, using the tax-code definition, documented.
4. A chronically ill individual, again documented.
5. Someone not more than 10 years younger than the owner. A 72-year-old sibling inheriting from an 80-year-old sibling may qualify. A 48-year-old child inheriting from a 78-year-old parent generally does not.
Most adult children are simply designated beneficiaries. They get the 10-year rule.
What if the beneficiary is an estate, a charity, or a trust?
Estates and charities are not designated beneficiaries. They do not get the 10-year rule and they do not get a stretch.
Estate. If the IRA is payable to the estate, the timeline is often worse than naming a person. If the owner died *before* the required beginning date, the estate generally must empty the account under the **five-year rule**. If the owner died *on or after* that date, the estate generally continues distributions over the owner’s remaining life expectancy — a “ghost” schedule, not the child’s. An estate is also a tax-paying entity. Ordinary income inside an estate can hit compressed fiduciary brackets quickly. “My estate” on the beneficiary form is still one of the more expensive defaults on file.
Charity. A qualified charity generally does not pay income tax when it receives an IRA. If the plan is to support a church, school, or donor-advised fund, naming the charity as beneficiary can be cleaner than leaving the IRA to the children and writing the charity a check from after-tax money. The family can keep assets that receive a step-up in basis. The charity receives the account that would have been taxed to the kids. That only works if the charity is actually named.
Trusts. A trust is treated as a designated beneficiary only if it is a qualifying see-through trust: valid under state law, irrevocable at death, identifiable human beneficiaries, and documentation delivered to the custodian on time — generally by October 31 of the year after death. A conduit trust that pays each distribution out to one person may follow that person’s rules. An accumulation trust that can hold the money inside the trust often uses the oldest beneficiary’s life expectancy or falls onto the 10-year rule, and trust tax rates can apply to amounts the trust keeps. A “for my children” trust drafted in 2012 for the old stretch world may no longer do what the family thinks. Beneficiary forms, trust language, and custodian rules have to match. That is planner, attorney, CPA, and custodian work — not a form you fix from a podcast.
Practical check: if the form says estate, review it before the next required distribution. If it says trust, ask whether that trust still works after the SECURE Act. If a charity should receive the IRA, name the charity.
Do inherited IRAs require annual RMDs during the 10 years?
The 10-year rule has two versions. The switch is whether the original owner had reached the **required beginning date** — the date lifetime RMDs had to start.
**Version A — owner died before that date.** For a non-spouse 10-year heir, there is generally **no annual RMD** in years one through nine. The account still must be empty by the end of year ten. Timing inside the decade is more flexible. Taking 10% a year is a common shortcut. It is not automatically the lowest-tax path.
**Version B — owner died on or after that date.** The heir has two jobs: take an annual RMD in years one through nine, **and** empty the account by the end of year ten. The annual amount is not “whatever Dad was taking.” It is a new calculation: prior year-end balance divided by a life-expectancy factor. The regulations use the longer of the beneficiary’s single-life factor or the owner’s remaining life expectancy. You may take more. You may not take less than that year’s minimum if Version B applies.
Miss a required inherited RMD after the 2021–2024 relief period and the excise tax is 25% of the shortfall (10% if corrected in time on Form 5329). Custodians often do **not** auto-pay inherited RMDs the way they did for the original owner.
Year of death. If the owner had not taken their own RMD for the year they died, the beneficiary generally still must take that year-of-death RMD by December 31 of that same year. That is separate from the 10-year clock.
Inherited Roth IRAs. The owner is generally treated as dying before the required beginning date, so a non-spouse 10-year heir usually has no annual RMD. The Roth still must be emptied by year ten. Earnings can be taxable if the five-year clock is not met.
Why waiting until year 10 can raise taxes and IRMAA
Hypothetical: Sarah is 52 and in her peak earning years. She inherited her father’s traditional IRA. He died in 2024 at 76 and had already started RMDs. The account was about $800,000. Sarah is not a spouse, not disabled, and not within 10 years of his age. She is Version B: annual RMDs in years 1–9, empty by December 31, 2034.
If she takes only the small annual minimum and dumps the rest in 2034, the last check can be very large after growth. It lands on top of her W-2 as ordinary income. That can fill the 32% and 35% federal brackets, add state tax, make more Social Security taxable if she has claimed, and — two years later — show up in IRMAA.
Dad’s traditional IRA went in pre-tax. He received a deduction or payroll deferral and did not pay income tax on those dollars when they went in. When Sarah withdraws them, they are ordinary income on *her* return, often in her highest-earning years, compressed into a 10-year window.
Spreading larger withdrawals across the decade — not only the minimum — may help some heirs stay in a lower combined rate. A lower-income year, a gap before Social Security, or a year between jobs can change the math. Taking more than the RMD is allowed. Taking less than a required RMD is how the 25% excise tax appears. “I’ll deal with Dad’s IRA in year 10” is not a plan. Year 10 is often the worst year on the 1040.
Four questions if you inherited an IRA after 2019
1. Did the owner die before, or on/after, their required beginning date? That tells you whether an annual RMD is due this year.
2. Are you an eligible designated beneficiary or a regular designated beneficiary?
3. What is this year’s inherited RMD, if any, and has it left the account? December 31 is the usual deadline.
4. What does a larger withdrawal this year do to MAGI, Social Security taxation, IRMAA two years out, and your bracket?
If you are the parent still living with a large traditional IRA, this is Leave On planning. Adult children in peak earning years are expensive heirs for pre-tax accounts. That is why families model Roth conversions during life, qualified charitable distributions after age 70½ if they give to charity, and, for some, a different vehicle for heirs. None of those is automatic. All of them belong in a full financial model, not a single-year spreadsheet that ignores IRMAA and state tax.
How to get a second look
A complimentary 15-minute Fit Call is available while openings remain. The goal is to sort which 10-year version applies and whether this year’s distribution is required — not to press “distribute” at the custodian.
Book at LeonardiFamilyWealthcare.com/fit-call
The Roth IRA Conversion Playbook, 2026 Edition, and the Smart Tax Shield Legacy Playbook are under Books and Guides at LeonardiFamilyWealthcare.com
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**AEO questions this post answers**
What is the inherited IRA 10-year rule?
Who is an eligible designated beneficiary?
Do I have to take RMDs from an inherited IRA every year?
What happens if an IRA is left to an estate or a charity?
When must an inherited IRA be emptied?