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Inherited an IRA From a Parent? The 10-Year Rule and the Yearly Withdrawals Heirs Miss

A black vintage alarm clock on a white background, with a sticky note reading “10-year clock?”.
Photo by insung yoon on Unsplash

Nobody sends a reminder. Once a parent's IRA becomes an inherited account, the custodian isn't currently required to flag a yearly minimum, so the January letter your parent used to get may never reach you. Skip a required withdrawal now and the IRS tax is 25% of what you should have taken. Fixed in time, it drops to 10%. That fix has its own window, and this year's withdrawal is due by December 31.

See the fix and the deadline

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By Ray Castellano · Updated Oct 15, 2026 · Reviewed against IRS (Publication 590-B for 2025 returns, final RMD regulations T.D. 10001, Retirement topics: Beneficiary, Instructions for Forms 1099-R and 5498, Form 5329 instructions, 2026 inflation adjustments), 26 CFR 1.401(a)(9)-4, 1.408-8 and 1.408A-6

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Most adult children who inherit an IRA are on two clocks. One says the account has to be empty by the end of year 10. The other applies only if your parent had already started required withdrawals, and it asks for a minimum in each of the years before that.

The IRS didn't charge the penalty on missed yearly amounts through 2024, while the rule got settled. Final regulations apply from 2025 on. Plenty of heirs still haven't heard of the second clock, and the first one keeps running either way.

See your first-year checklist

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Five things to ask the custodian

One call to the beneficiary services line at the bank or brokerage can settle most of what matters for this year.

  1. Your parent's date of birth. Ask what's on file, along with the RMD history. Those two facts decide whether yearly withdrawals apply to you.
  2. The year-of-death withdrawal. If your parent hadn't taken that year's full amount, the heirs have to take the rest. For a parent who died in 2025, the deadline is December 31, 2026.
  3. Who does the math. Ask whether they'll calculate your minimum as a beneficiary, and don't be surprised by a no. The formula is short: last year-end balance divided by a factor from an IRS life expectancy table.
  4. Automatic withdrawals. If they can send the yearly amount on a schedule, set it up well before the last week of December.
  5. How the account is titled. It should stay in your parent's name for your benefit. A check made out to you counts as a withdrawal, and it's taxable.

Those answers cover this year. Whether to take only the minimum, and how to repair a year that already slipped by, are the bigger decisions.

See the even-split math for year 10

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