Just Inherited an IRA? What to Do in the First 30 Days

Inheriting an IRA is a time-sensitive event with real legal deadlines. This guide tells you exactly what to do first, what decisions you face, and which mistakes to avoid before you make any moves with the money.

Step 1: Do not take a distribution yet

The instinct after inheriting an IRA is sometimes to take the money out immediately. Resist it — at least until you understand the rules. Two reasons:

• Distributions are taxable income. A $400,000 traditional inherited IRA taken as a lump sum in one year will be added to your other income and likely push you into the 37% bracket. The same money spread over ten years at a low-income point could cost half as much in taxes.
• You cannot put it back. For non-spouse beneficiaries, the 60-day rollover rule does not apply to inherited IRAs — once you take a distribution, it cannot be redeposited.¹ (The one exception: surviving spouses who roll over into their own IRA.) Unlike your own IRA where you can reverse a distribution within 60 days, inherited IRA distributions are permanent.

The one exception to waiting: if the original owner died after their Required Beginning Date (RBD) and hadn't yet taken their RMD for the year of death, that year-of-death RMD must be distributed to you by December 31 of the year following the owner's death. See Year-of-Death RMD for the calculation.

Step 2: Gather these documents immediately

You will need these to open the inherited IRA account and to make informed decisions:

• Death certificate (custodians typically require a certified copy)
• The IRA account statement (or contact the custodian directly to confirm what exists)
• The original IRA beneficiary designation form — you'll want to confirm you're listed correctly and how (by name? as a trust? per stirpes?)
• The decedent's most recent Form 1099-R and Form 5498 if available (helps establish whether they took their RMD for the year of death)
• Your own Social Security number and ID — required to set up the inherited account

If the IRA custodian is unknown, check the decedent's tax returns for Form 5498 or Form 1099-R, which identify the institution. Bank and brokerage statements from the past year often show IRA accounts.

Step 3: Identify your beneficiary category — this determines everything

The SECURE Act created a two-tier system. Which rules apply to you depends entirely on your relationship to the deceased and your individual circumstances. Follow this decision path:

Are you the surviving spouse?

If yes, you have the most flexibility of any beneficiary type. You can:

• Roll the inherited IRA into your own IRA — treating it as if it were always yours. Best if the deceased was older than you and RMDs aren't a concern yet, or if you want to delay RMDs as long as possible.
• Keep it as an inherited IRA in your name as beneficiary — best if you are under 59½ and may need distributions before that age (inherited IRA distributions avoid the 10% early withdrawal penalty; your own IRA does not).

This is one of the highest-stakes decisions for surviving spouses. See Spousal Rollover vs. Inherited IRA for a full comparison with example scenarios.

Are you a non-spouse? Then: are you an Eligible Designated Beneficiary (EDB)?

Five categories of non-spouse beneficiaries still qualify for the stretch IRA — lifetime distributions using the Single Life Expectancy Table, not the 10-year rule:

1. A minor child of the deceased (until age 21, then 10-year rule kicks in)
2. A disabled individual (as defined under IRC § 72(m)(7))
3. A chronically ill individual (as defined under IRC § 7702B(c)(2))
4. An individual not more than 10 years younger than the deceased

See Eligible Designated Beneficiary (EDB) for the full definitions and how to document your status. If you qualify as an EDB, your rules are significantly different — and more favorable — than the majority of non-spouse inheritors.

If you're a non-EDB non-spouse: the 10-year rule applies

This covers most adult children, grandchildren, siblings, and other non-spouse, non-EDB beneficiaries. Under the SECURE Act 10-year rule:

• The entire inherited IRA must be depleted by December 31 of the 10th anniversary of the owner's death.
• If the original owner died after their Required Beginning Date (RBD — April 1 of the year after turning 73 for those born 1951–1959, or 75 for those born 1960+), you must also take annual RMDs throughout the 10-year window, calculated using the Single Life Expectancy Table.²
• If the original owner died before their RBD, no annual RMDs are required — you can take distributions in any pattern you choose, as long as the account is empty by year 10.

See SECURE Act 10-Year Rule for the full framework, and Non-Spouse Inherited IRA for the most common scenario (adult child inheriting from a parent).

Is the beneficiary a trust, estate, or charity?

Non-individual beneficiaries follow different rules. Trusts can qualify for stretch IRA treatment if they meet the see-through requirements — but it requires careful documentation. Estates and non-qualifying trusts use the 5-year rule (pre-RBD) or ghost life expectancy (post-RBD). See Trust Beneficiary Guide and Estate Beneficiary Guide.

Step 4: Flag the disclaimer deadline — 9 months from the date of death

You have 9 months from the decedent's date of death to execute a qualified disclaimer under IRC § 2518 and refuse all or part of the inherited IRA.³ Once this window passes, you cannot disclaim — the account is permanently yours.

Disclaiming makes sense when:

• You are in a high bracket and a younger sibling or the decedent's spouse (who may not yet be in RMDs) would be better positioned to receive the funds
• Creditor concerns make accepting the IRA inadvisable
• Estate planning goals favor routing assets elsewhere

Even if you have no intention of disclaiming, note this date. An attorney or advisor may surface a reason to disclaim that isn't obvious at first. See Disclaim an Inherited IRA for the requirements and common uses.

Step 5: Open the inherited IRA account (don't take a distribution instead)

The account must be titled in a specific way to preserve inherited IRA treatment:

[Decedent's name], deceased [date], IRA F/B/O [Your name], beneficiary

The transfer must be done as a direct trustee-to-trustee transfer — not by taking a check and re-depositing. If a check is issued to you personally, you cannot roll it over (the 60-day rollover rule does not apply to non-spouse beneficiaries).¹ The custodian can typically initiate the transfer on your behalf. See How to Open an Inherited IRA for the step-by-step process, required documentation, and common mistakes.

Step 6: Address year-of-death RMD if the decedent was past their RBD

If the original owner had already passed their RBD (generally April 1 of the year after turning 73 or 75, depending on birth year), and they died before fully taking their own RMD for the year, that remaining amount is your responsibility as beneficiary. The deadline is December 31 of the year following the year of death.⁴

Your custodian may not flag this automatically — confirm whether the decedent completed their RMD for the year of death. If they didn't, calculate the shortfall and take the distribution before the December 31 deadline to avoid the 25% excise tax (reducible to 10% within a 2-year correction window). See Year-of-Death RMD.

Step 7: If you are one of multiple beneficiaries, establish separate accounts by December 31

If the IRA named multiple beneficiaries, each beneficiary must establish their own separate inherited IRA account by December 31 of the year following the owner's death to use their own life expectancy factor for RMD calculations.⁵ Missing this deadline means all beneficiaries must use the oldest beneficiary's (shorter) factor — which accelerates distributions and the associated tax bill. See Multiple Beneficiaries for the timeline and how to request the split from your custodian.

Critical deadlines — reference card

Step 8: Build your 10-year plan before making any distribution elections

If you're a non-EDB non-spouse subject to the 10-year rule, the distributions are not just a tax compliance exercise — they're a 10-year income-planning event. The difference between equal annual withdrawals and an optimized strategy can be $50,000–$150,000 in tax savings on a $500,000 inherited IRA, depending on your bracket trajectory and the presence of Roth conversion opportunities.

Factors that matter for your plan:

• Your current vs. future income trajectory. Are you 45 and in peak earnings years, or 60 and planning to retire at 65? The low-income years in the window are the tax-efficient ones.
• Your own Roth IRA conversion opportunity. If you can convert your own pre-tax IRA to Roth during years when the inherited IRA distributions are low, you're compressing two tax-reduction strategies into the same window. The Roth Conversion Coordinator models this exactly.
• Whether the decedent was past their RBD. If yes, annual RMDs are required — you don't have the freedom to delay all distributions to year 10. See Inherited IRA RMD Rules.
• Medicare IRMAA exposure. Large distributions in years 2–3 before you turn 65 won't affect IRMAA directly, but year-10 lump-sum withdrawals for beneficiaries already on Medicare can trigger a 2-year surcharge spike. See Inherited IRA and IRMAA.
• State income taxes. A handful of states don't tax IRA distributions at all; others do. If you live in a high-tax state and are close to retirement, timing around a state tax change may be relevant. See State Taxes on Inherited IRA.

Questions to bring to your first advisor meeting

An advisor specializing in inherited IRA planning will need to understand your full picture. Coming prepared with answers to these questions will let them model your options quickly:

1. What was the decedent's age at death — and had they passed their Required Beginning Date (age 73 for those born 1951–1959)?
2. Did they take their full RMD for the year of death?
3. What is the inherited IRA balance, and is it entirely pre-tax (traditional) or after-tax (Roth)?
4. Are there other beneficiaries named on the same account?
5. What is your current taxable income, and what is your expected income trajectory over the next 10 years?
6. Do you have your own traditional IRA or 401(k) that you haven't yet converted to Roth?
7. Are you already on Medicare, or when do you expect to enroll?
8. Do you have any charitable goals — such as donating a portion of the inherited IRA to a nonprofit?

Sources

1. IRC § 408(d)(3)(C): "Section 408(d)(3)(A) shall not apply to any amount received by an individual from an individual retirement account or individual retirement annuity if at any time during the 5-year period ending with such taxable year such individual had received any amount from any other such account or annuity which was not includible in gross income because of the application of this paragraph … [and] the term 'individual retirement account' does not include an account or annuity inherited by a beneficiary (other than the individual's surviving spouse)." Non-spouse inherited IRA distributions cannot be rolled over. IRS Publication 590-B.
2. IRS T.D. 10001, finalized July 18, 2024. Confirms that non-EDB beneficiaries subject to the SECURE Act 10-year rule must take annual RMDs in years 1–9 if the original owner died after their Required Beginning Date. RBD: April 1 of the year following the year the owner attains age 73 (SECURE 2.0, for those born 1951–1959) or 75 (born 1960+). IRS — RMD FAQs.
3. IRC § 2518: Qualified disclaimer requirements — writing, 9-month deadline from date of transfer (death), no direction of where disclaimed property passes, disclaimer must be made before beneficiary accepts any benefit from the interest. 26 U.S.C. § 2518 (Cornell LII).
4. Treas. Reg. § 1.401(a)(9)-4(b)(4): Year-of-death RMD must be taken by the beneficiary if the owner died before taking the full distribution for the year. Deadline: December 31 of the year following the owner's death for the beneficiary's first required distribution (which includes the year-of-death shortfall). IRS Publication 590-B.
5. Treas. Reg. § 1.401(a)(9)-8(a): Separate account rules for multiple IRA beneficiaries. Separate accounts must be established by December 31 of the calendar year following the year of the IRA owner's death. After that date, the separate account rules no longer apply and all beneficiaries are treated as a group using the oldest beneficiary's applicable distribution period. IRS — RMDs for IRA Beneficiaries.

Rules verified against SECURE Act (2019), SECURE 2.0 (2022), and IRS T.D. 10001 (July 2024). Required Beginning Date ages reflect SECURE 2.0 § 107 (age 73 for those born 1951–1959; age 75 for those born 1960 or later). Disclaimer deadline per IRC § 2518. Values and rules current as of May 2026.