Due to a law change, heirs of Roth or traditional IRAs whose original owners
died after Dec. 31, 2019 must transfer the assets into an Inherited IRA held in your name and empty the accounts within 10 years. Annual payouts aren’t required during this period. But be wary of withdrawing too much in one year from a traditional IRA. Doing so could move you into a higher tax bracket.
The law has exceptions to the 10-year payout for some heirs, including surviving
spouses. They can continue to stretch required payouts—and taxes on them—over
many years. For minor children of the deceased IRA owner, the 10-year withdrawal
period often begins when they reach the age of majority, which is 18 in most
states. Students may be able to delay the 10-year period up to age 26.
If the original owner died before 2020, the heirs can often take required withdrawals over many decades, a technique known as the Stretch IRA.