How to Protect Every Dollar of Your Inherited IRA!
Estate planning attorney Andrew Dósa explains that under the new rule, an adult child who inherits an IRA must withdraw the full balance within 10 years, and failing to take the required minimum can now trigger a penalty of up to 25%. Spouses, minor children, and disabled children are exceptions.
Excerpt summaries from the video and transcripts · how we make them
Answered by Andrew Dósa · Tacoma, WA and Oakland, CA
Highlights
Frequently Asked Questions
What changed about inheriting an IRA?
A new rule upended how an inherited IRA must be drawn down—the old approach of stretching withdrawals over a lifetime no longer applies for most heirs.
How long do you have to empty an inherited IRA?
An adult child who inherits an IRA generally must withdraw the entire balance within ten years.
What's the penalty for missing a required withdrawal?
Failing to take the required minimum withdrawal can trigger a penalty of up to 25% of the amount that should have been withdrawn.
Are there exceptions to the ten-year rule?
Yes—three main exceptions apply, starting with a surviving spouse, along with minor children and disabled children.
Who understands these IRA rules best?
A CPA often knows these inherited-IRA rules better than an estate-planning attorney, so it's worth consulting one.
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