15 Jan What happens to an inherited IRA when someone dies?

Q. What happens to an inherited Stretch IRA or Roth if the beneficiary dies before withdrawing all the funds before the 10 year maximum period?
— Beneficiary

A. Let’s clear up a few things.

The rules for inherited IRAs have changed.

Prior to 2020, if you inherited an IRA from someone who was not your spouse, you could make withdrawals from the IRA over your lifetime, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

In addition, you could name a successor beneficiary who would inherit the IRA if you passed away, Kiely said. They could take distributions over their lifetime.

Thus came the Stretch IRA.

Starting after 2019, most people who inherited an IRA from someone who was not their spouse had to deal with the 10-year rule, Kiely said.

“The 10-year rule basically says you must withdraw 100% of the IRA within 10 years of the decedent’s passing,” he said.

If the decedent was old enough to be taking Required Minimum Distributions (RMDs), then you, the inheritor, must begin taking RMDs over your life expectancy starting the year after the decedent’s passing, Kiely said.

If the decedent was not old enough to be taking RMDs, then you, the inheritor, could do nothing for 10 years and then withdraw the entire IRA by Dec. 31 of the 10th year after the decedent’s passing.

So then, if you die, you would leave the IRA to your beneficiary and the rules would pick up based on that person’s relationship to you and whether or not you started to take RMDs.

You want to make sure that you take the correct distributions, so you should talk to your account custodian or speak with a tax preparer so you don’t fall afoul of the rules.

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This story was originally published in January 2026. 

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