If you’ve recently inherited an IRA, here are key steps to help you stay organized and avoid costly mistakes.
- Obtain a certified copy of the death certificate of the original IRA owner.
- Locate the most recent IRA account statement and the original beneficiary designation form.
- Confirm the date of death and whether the owner had reached their Required Beginning Date (RBD).
- Gather personal identification (Driver’s License, SSN) for yourself and any co-beneficiaries.
- Contact the financial institution to open an IRA Beneficiary Distribution Account (BDA).
- Decide on a distribution strategy: Spousal rollover vs. 10-year rule vs. 5-year rule.
- Calculate the 2026 Required Minimum Distribution (RMD) if applicable.
- Schedule the annual RMD withdrawal by December 31st to avoid the 25% penalty.
- Update your own beneficiary designations on the new BDA account.
- Consult with a tax professional regarding the impact on your 2026 tax return.
A little upfront organization can save significant time, stress, and taxes later. Download your checklist below…