Accounts
Inherited & Beneficiary Accounts
Successor account administration for beneficiaries
There is no single rulebook for an inherited retirement account. The right timeline depends on who died, when, at what age, and your relationship to them.
Key takeaways
- Rules depend on the original owner’s date of death, their age, the account type, and the beneficiary category.
- There is no single universal timeline — the facts drive the result.
- Different rules apply to spouses, non-spouses, and certain eligible designated beneficiaries.
What it is
Successor account administration for beneficiaries. The account is a structure; the investments it holds are separate and carry their own risks.
Who it’s for
- Spouses and non-spouse beneficiaries
- Beneficiaries of Traditional or Roth IRAs
- Trustees of trusts named as beneficiary
- Anyone facing the ten-year rule
How it works
- Provide documentation of the inheritance and beneficiary status.
- The account is retitled appropriately.
- Required distributions follow the applicable rules for your situation.
Eligibility
For beneficiaries of a deceased account owner.
Contributions and funding
Not a contributory account; funded by the inherited balance.
What it can hold
Consistent with the underlying account type.
Taxes and reporting
Distributions are generally taxable for Traditional balances; timing rules vary. Requires tax review
Withdrawals and distributions
May involve a 10-year rule, annual distributions, or life-expectancy rules depending on the facts. Do not assume a single timeline.
How Investor Services custodies it
Investor Services retitles the account appropriately and processes the distributions you direct under the rules for your situation. Determining the correct timeline is fact-specific — get professional guidance.
Risks and limitations
- Missing a required distribution can trigger an excise tax
- The rules are fact-specific and easy to get wrong
- Investment risk, including loss of principal
Common mistakes to avoid
- Assuming everyone gets a ten-year window
- Missing a required annual distribution within that window
- Commingling an inherited account with your own
- Overlooking a surviving spouse’s additional options
Frequently asked questions
Do beneficiaries always have 10 years?
No. It depends on the owner’s date of death and age, your beneficiary category, and the account type. Requires tax review
Are spouses treated differently?
Often yes, with additional options.
What about inherited Roth accounts?
Distribution timing rules still apply, though qualified Roth withdrawals can be tax-free.
Educational only. This page is general information, not individualized investment, legal, or tax advice. Rules depend on your account type, transaction, tax year, and circumstances — consult a qualified professional.