The Planning Corner: Inherited IRAs for Adult Beneficiaries

Feb 16 2026 | Back to Blog List

VIDEO TRANSCRIPT:

David Ernst: I'm David Ernst, partner at Cedar Point Capital Partners. I'm joined by Nick Timm, our director of financial planning. Today, we're talking about inheriting IRA accounts for adult beneficiaries.

For many families, inheriting IRA accounts often pass to adult children, making them what the IRS calls non-eligible designated beneficiaries. Nick, who does that include?

Nick Timm: Yeah, so a non-EDB is generally a non-spouse beneficiary over the age of 21. So for adult children, that means the lifetime stretch is gone and the 10-year rule applies.

David: So that creates a bigger decision than just following required minimum distribution rules?

Nick: Right. So now the question is more of how much to withdraw over the next 10 years rather than what is required.

David: Okay, let's make this real. Can you give us an example?

Nick: Sure. So let's say a parent dies at age 85 and leaves a $1 million IRA to a son, age 60. Since the parent was already taking required minimum distributions (RMDs), the son has to continue those. But by retiring at 62, he may elect to say, “I'm going to take those required distributions in the first couple years and then take larger distributions in the last eight years when he's in retirement.”

David: So, compliance early, strategy later. Let's consider another scenario.

Nick: So, let's just push it out 10 years. Let's say the parent is 95, and let’s say the son is now 70 and inheriting that same $1 million IRA. The son now has his own RMDs in three years at age 73. So he may decide to take larger withdrawals on the first three years while taking smaller withdrawals in the last seven.

David: If you've inherited an IRA or expect to, thoughtful planning around this really matters. To learn more about our approach or how we help families navigate these decisions, reach out and let’s start a conversation.

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