Inherited IRA Distribution Rules

Inherited IRA distribution rules come into play when an IRA participant dies. The post-death distribution rules for an Inherited IRA depend on many factors:

• Whether the IRA owner died before or after they were required to begin receiving distributions from their IRA.
• Whether the IRA owner designated beneficiaries to receive distributions from their IRA following their death.
• Whether the IRA owner designated a spouse, a non-spouse, a minor child, an adult child, or a trust as the beneficiary.
• Whether the IRA owner designated multiple beneficiaries.
• Changes in the law governing the taxability of inherited IRAs.

The SECURE ACT became effective on  January 1, 2001. This law significantly changes the ability of most beneficiaries to stretch out their distribution over their lifetimes. Instead, they will now have to take out their distributions over a 10-year period. See Analysis of SECURE Act.