Inherited IRA Distribution Rules. Distributions in the life expectancy method begin no later than the end of the year the late asset holder would have reached the age of 70 ½. Distribution rules vary depending on whether or not you are a spouse or non-spouse of the original owner of the IRA. Distribution Rules for the Inherited IRA with the Estate as Beneficiary. Your best course of action will depend on who has passed away and who is inheriting the IRA… Special rules exist for spouses & other beneficiaries. One of the biggest impacts of the SECURE Act is upon the changes in the distribution rules for inherited IRAs. RMDs are designed to ensure that investments in IRAs don't grow tax-deferred forever and this carries over to the beneficiary of the IRA. For more information about the rollover rules, go to irs.gov or consult a tax advisor. The CARES act temporarily waives RMDs for all types of retirement plans for calendar year 2020. An inherited IRA is an account opened for someone inherits an IRA or retirement plan from a deceased owner. The rules that surround inherited IRAs can be complicated and confusing. Inherited IRAs present many complications, even more so than the already-strict rules of an IRA plan. Goodbye to the Stretch IRA. The rules for inherited Roth IRAs are generally the same as for inherited Traditional IRAs, with a few differences. Open an inherited IRA and use either the life expectancy method or the five year method - With either of these methods, you will transfer the assets into an inherited IRA in your name. First, to help decide the distribution option, the IRS established a few guidelines: The IRS allows the executor to open an inherited IRA in the name of the decedent for the benefit of the estate. RMD Rules for Inherited IRAs. If you've inherited an IRA, learn about the required minimum distributions (RMDs) you may need to take soon, as well as how RMDs work in the long run. New guidance permits RMDs taken in 2020 from inherited IRAs to be rolled back into the inherited IRA the distribution came from, by August 31, 2020. The executor has three options available to handle the inherited traditional IRA when the estate is the beneficiary.