How to Transfer an Inherited IRA: Titling, Deadlines, and Splits

To transfer an inherited IRA, open a new inherited IRA at the custodian you want to hold the money, title it to show both the deceased owner and you as beneficiary, and instruct the sending custodian to move the funds directly to the new account as a trustee-to-trustee transfer. Never accept a check made out to you: for non-spouse beneficiaries, that check is a taxable distribution and cannot be put back.

The paperwork is straightforward once you know which category of heir you are and which type of account to open. Getting those two things right is most of the job.

Start With Your Relationship to the Deceased

Your options at the transfer stage depend entirely on whether you were the account owner’s spouse.

A surviving spouse can roll the inherited funds into their own existing IRA or a new IRA in their own name, which effectively makes the money theirs going forward — new contributions allowed, withdrawals delayed until their own required beginning date, their own beneficiaries named. A spouse can also choose instead to keep the money in an inherited IRA titled to the deceased. That second path is often the right one if the surviving spouse is under 59½ and may need the money soon, because distributions from an inherited IRA are exempt from the 10% early withdrawal penalty at any age.¹²

A non-spouse beneficiary has one option at transfer: open an inherited IRA. You cannot retitle the account into your own name, and you cannot combine it with your own IRA. Adult children, siblings, friends, and most other individual heirs fall here. A narrower group — minor children of the account owner, individuals who are disabled or chronically ill, and people no more than ten years younger than the deceased — are called eligible designated beneficiaries and get more favorable withdrawal rules later on, but the transfer mechanics are the same.¹

How the New Account Must Be Titled

If you’re a non-spouse beneficiary, the new inherited IRA must clearly show both the deceased and you. A typical format reads “Jane Smith, Deceased (01/15/2025), IRA FBO John Smith, Beneficiary.” Some custodians reverse it: “John Smith as Beneficiary of Jane Smith.” Wording varies, but three elements have to be present: the deceased’s name, the word “deceased” or the date of death, and your name as beneficiary. This titling is what tells the IRS that the account is an inherited IRA subject to beneficiary rules rather than an account you own outright.

A spouse who rolls the funds into their own IRA does not use this titling — the account is simply theirs, in their name.

Documents to Gather Before You Contact the Custodian

Missing a single item can add weeks to the process. Have all of this ready:

A certified copy of the death certificate. Order several extras; other estate matters will need them.
The decedent’s Social Security number and the account number at the sending institution.
Your government-issued photo ID, Social Security number, and current address.
The receiving institution’s Transfer of Assets form or Inherited IRA Application. This is where you identify the type of transfer and the new account’s tax ID.
A Medallion Signature Guarantee stamp if the custodian requires one. Participating banks and credit unions issue these to verify identity on higher-value transfers; some provide it free to existing customers, others charge a fee.

Fill out the forms carefully. The single most important checkbox is the one that classifies the movement as a trustee-to-trustee transfer rather than a distribution. A wrong selection there can convert a tax-free account movement into a taxable event.

Move the Money Trustee-to-Trustee, Not by Check

Non-spouse beneficiaries do not get the 60-day rollover window that applies to other IRA transfers. If the sending custodian issues a check payable to you, the amount is treated as a taxable distribution and you cannot deposit it into an inherited IRA later. The tax-advantaged status is gone permanently. This is one of the most expensive mistakes in inherited IRA transfers, and it happens easily when a custodian’s default process involves cutting a check.

The safe path is a trustee-to-trustee transfer, where the funds move directly from the old custodian to the new one and you never take possession. Different institutions call it a “direct transfer” or “direct rollover”; the defining feature is that the money never passes through your hands. Select that option explicitly on the paperwork.¹

A spouse choosing to roll the funds into their own IRA can use either a 60-day rollover or a trustee-to-trustee transfer. The direct transfer is simpler and eliminates any risk of missing the deadline.

Submit the paperwork by mail to the processing address or through the custodian’s online portal. Compliance review and the actual fund movement generally take a few weeks. You’ll get a confirmation when the new account is funded.

Deadlines That Start the Moment You Inherit

Two clocks start running before the transfer is even complete, and both are worth knowing at this stage so you don’t miss them while focused on paperwork.

First, the year-of-death distribution. If the original owner was already required to take annual distributions and died partway through the year without finishing that year’s withdrawal, the remainder has to come out — and the obligation falls to you as beneficiary. The amount is what the owner was required to withdraw for that year minus anything they already took.¹

Second, the ten-year rule. Most non-spouse beneficiaries who inherit from someone who died after December 31, 2019, must empty the inherited account by December 31 of the tenth year after the year of death.³ Whether you also owe annual withdrawals during years one through nine depends on whether the original owner had already reached their required beginning date at death. If yes, annual distributions are mandatory in those interim years. If no, you can take out any amount in any year as long as the balance is zero by the end of year ten. Under regulations the IRS finalized in 2024, penalties for missed annual distributions were waived through 2024; starting in 2025 they apply.⁴

The penalty for missing a required distribution is a 25% excise tax on the shortfall, reduced to 10% if you correct the mistake within two years. It’s reported on Form 5329 with your federal return for the year the distribution should have been taken.⁵

One piece of good news: no matter your age, distributions from an inherited IRA are exempt from the 10% early withdrawal penalty that normally applies before 59½.²

Splitting the Account When There Are Co-Beneficiaries

When more than one person is named on the same IRA, each beneficiary can — and generally should — open a separate inherited IRA for their share. That split has to be completed by December 31 of the year following the year the original owner died.⁶

The deadline drives how distributions get calculated. Miss it, and every beneficiary is locked into using the oldest beneficiary’s life expectancy, which costs younger heirs years of tax-deferred growth. Worse, if one co-beneficiary qualifies as an eligible designated beneficiary and another doesn’t, failing to split can pull the eligible beneficiary into the less favorable ten-year schedule. Initiate the separate transfers early enough to clear compliance review well before the December 31 deadline of the year after death.

If You’d Rather Not Take It

You don’t have to accept an inherited IRA. If the money would push you into a higher bracket or you’d prefer the assets pass to the contingent beneficiary, you can file a qualified disclaimer. The assets then transfer as if you had died before the original owner.

A qualified disclaimer must be in writing, delivered to the custodian within nine months of the account owner’s death, made before you have accepted any benefit from the account (including any distribution), and it cannot direct where the disclaimed assets go.⁷ The nine-month deadline is absolute, with no extensions. If you’re under 21, the clock doesn’t start until you reach that age.

When the Beneficiary Is a Trust

If the named beneficiary is a trust rather than an individual, do not initiate the transfer without first having the trust reviewed by an estate planning attorney. For the IRS to look through the trust and treat the underlying individuals as the designated beneficiaries — the difference between the ten-year rule and a much shorter five-year rule or the deceased owner’s remaining life expectancy — the trust must qualify as a “see-through trust.” The requirements include that the trust is valid under state law, becomes irrevocable no later than the owner’s death, and has identifiable beneficiaries. Trust tax rates are also compressed; income retained inside the trust above roughly $15,000 is taxed at the top marginal rate. The transfer mechanics look similar, but the consequences of getting the underlying trust structure wrong can accelerate taxation on the entire account.

1
Internal Revenue Service. Retirement Topics – Beneficiary
2
Internal Revenue Service. Additional Tax on Early Distributions From Traditional and Roth IRAs
3
Office of the Law Revision Counsel. 26 U.S. Code 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
4
Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024
5
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
6
Internal Revenue Service. Publication 590-B (2025) – Distributions From Individual Retirement Arrangements (IRAs)
7
Office of the Law Revision Counsel. 26 USC 2518 – Disclaimers