Inheritances

Inherited IRA & Investment Account Guidance

If You Inherited an IRA, You're on a Clock. Most People Don't Know It.

When you inherit a traditional or Roth IRA, the IRS doesn't give you forever. Under the SECURE Act, most non-spouse beneficiaries are required to fully withdraw the account within 10 years — and the decisions you make in year one can cost you thousands in unnecessary taxes. Inherited brokerage accounts work differently and don't carry the same mandatory distribution timeline, but they come with their own decisions. We can walk you through both.

There's no grace period. No do-overs. And most people inherit these accounts without a plan, a strategy, or any idea what options are even available to them.

At Coast Wealth Management, we work with beneficiaries across South Carolina and Tennessee to help them understand what they've inherited, what the rules actually say, and how to keep as much of it as possible.

What We Help You Navigate

01

Understanding Your Options

Every inherited account comes with choices, and each one has tax consequences. We walk you through a beneficiary IRA, lump-sum distribution, spousal rollover, and disclaiming the inheritance so you can decide with full information, not guesswork.

02

Building a Distribution Strategy

Taking too much too fast triggers a bigger tax bill. Taking too little can backfire near year 10. We model a distribution timeline around your income, tax bracket, and financial goals to help you spread withdrawals intelligently.

03

Coordinating With Your Other Accounts

An inherited IRA doesn't exist in a vacuum. We look at how it interacts with your existing retirement accounts, Social Security timing, and any other income sources, so the strategy actually fits your life.

WHAT YOU NEED TO KNOW

The 2019 Rule Change Eliminated a Strategy Many Plans Still Assume

The SECURE Act of 2019 eliminated the "stretch IRA" for most beneficiaries. What used to be a multi-decade tax-deferral tool is now a 10-year clock — and many existing estate and retirement plans haven't been updated to reflect it. If your plan was built before 2020, the inherited IRA strategy it assumed may no longer exist.

Qualified charitable distributions, strategic annual withdrawals, and careful bracket management inside that 10-year window can still dramatically reduce your tax exposure. For beneficiaries who also hold their own pre-tax retirement accounts, coordinating Roth conversions of those accounts alongside inherited IRA distributions is one of the most effective tax planning moves available — but only if someone maps the strategy out in advance.

We're fiduciaries. That means we're required to act in your interest, not ours. We don't earn commissions. We build plans.

Couple reviewing inherited account documents together

Mistakes That Cost Beneficiaries Thousands

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Withdrawing everything in year one and jumping a tax bracket

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Not opening a beneficiary IRA, losing deferral options entirely

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Taking a distribution instead of requesting a trustee-to-trustee transfer — non-spouse beneficiaries cannot roll inherited IRA funds back in once they've been paid out

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Assuming spousal rules apply when you're not the spouse

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Ignoring state tax implications (SC taxes retirement income differently than TN)

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Waiting until year 9 to think about a distribution strategy

These aren't hypotheticals. They're the calls we get after the fact. We'd rather be the call you make first.

Common Questions About Inherited IRAs

  • What is the 10-year rule for inherited IRAs?

    Under the SECURE Act, most non-spouse beneficiaries must withdraw the entire balance of an inherited IRA within 10 years of the original owner's death. There are no required annual minimums within that window, but the full account must be depleted by December 31 of the 10th year.

  • Can I roll an inherited IRA into my own IRA?

    Only if you're the surviving spouse. Non-spouse beneficiaries cannot roll the funds into their own IRA. They must open a separate inherited (beneficiary) IRA and follow the applicable distribution rules.

  • What happens if I miss the 10-year deadline?

    Any remaining balance is subject to a 25% IRS excise tax (reduced from 50% after SECURE 2.0), plus ordinary income tax on the withdrawal. Planning ahead matters.

  • Do Roth IRAs have the same rules for beneficiaries?

    Yes, inherited Roth IRAs are also subject to the 10-year rule for most non-spouse beneficiaries. The difference is that Roth distributions are tax-free, so the strategy around timing changes significantly.

  • Does South Carolina tax inherited IRA withdrawals?

    South Carolina taxes retirement income, including inherited IRA withdrawals, though there are deductions available for taxpayers over 65. Tennessee has no state income tax. We factor your state of residence into every distribution strategy.

  • When should I meet with a financial advisor after inheriting an account?

    As soon as possible, ideally within the first 90 days. Some decisions, like disclaiming the inheritance, have strict deadlines. The earlier you get clarity, the more options you have.

Don't Wait Until Year 9 to Make a Plan

A complimentary review costs nothing. Missing the window can cost a lot. Let's talk through what you've inherited and what your options look like.

Fiduciary • Fee-Based • Independent • Serving SC, NC & TN