March 23, 2026

Explore planning considerations families may evaluate in response to the SECURE Act’s 10-year rule and how inherited retirement accounts can influence long-term tax and legacy planning.

Advanced Planning Considerations: Navigating the 10-Year Rule for Inherited Retirement Accounts

The SECURE Act introduced several significant changes to retirement planning, including the 10-year rule governing many inherited retirement accounts. For families with substantial IRA or retirement assets, this rule can influence how retirement wealth transitions across generations and how taxes may apply to those distributions.

Because retirement accounts often represent a meaningful portion of family wealth, many business owners and multigenerational families are reviewing their planning strategies to understand how the rule may affect long-term tax and legacy considerations.

Understanding the structure of the rule and the planning frameworks sometimes discussed in response to it can help families make more informed decisions as part of a comprehensive estate and financial plan.

Understanding the SECURE Act’s 10-Year Distribution Rule

Before the SECURE Act was enacted, many beneficiaries were able to withdraw inherited retirement assets gradually over their lifetime. This approach—often referred to as the “stretch IRA”—allowed beneficiaries to extend tax deferral over multiple decades.

Under the current rules, many non-spouse beneficiaries, including adult children, must generally withdraw the entire balance of an inherited retirement account within 10 years of the original account owner’s death.

Depending on the beneficiary’s financial circumstances, this structure may create several considerations, including:

• The timing of taxable withdrawals during a beneficiary’s peak earning years
• The loss of extended tax-deferred compounding that previously existed under the stretch rules
• The coordination of retirement assets with broader estate and legacy planning objectives

Because these outcomes can vary widely, planning discussions often focus on evaluating potential tax implications and distribution timing within a broader financial strategy.

Lifetime Roth Conversion Considerations

Some families explore whether gradual Roth IRA conversions during the account owner’s lifetime could influence how retirement assets are ultimately transferred to beneficiaries.

Converting traditional retirement assets to a Roth IRA generally involves recognizing taxable income in the year of conversion. In certain situations, families may evaluate whether converting portions of retirement assets over time aligns with their overall tax planning approach.

Potential considerations sometimes discussed include:

• Paying income taxes during the original owner’s lifetime rather than during the beneficiary’s withdrawal period
• Changing the tax characteristics of inherited assets
• Coordinating retirement planning with anticipated future tax environments

However, Roth conversions can increase taxable income in the year they occur and may not be appropriate in every situation. As a result, they are typically evaluated alongside broader tax planning considerations.

Charitable Planning Structures

Families with charitable goals sometimes review how retirement assets fit into their philanthropic planning strategies.

Charitable Remainder Trusts

One planning structure that may be evaluated is a Charitable Remainder Trust (CRT). In certain situations, retirement assets can be directed to a CRT at death, with the trust providing income distributions to beneficiaries over a defined period before the remainder passes to a charitable organization.

CRTs are complex structures that involve legal, tax, and administrative considerations. Their suitability depends on factors such as charitable intent, family income needs, and overall estate planning objectives.

Charitable Beneficiary Designations

Another approach sometimes considered is naming a charitable organization as a beneficiary of retirement assets, while directing other types of assets to family members.

Because qualified charities typically do not pay income tax on retirement account distributions, this approach may influence how certain assets are allocated within a broader estate plan.

The overall effect of this strategy depends on each family’s tax situation, asset mix, and philanthropic goals.

Trust and Estate Planning Coordination

Trust structures are sometimes used in estate planning to help manage how assets are distributed to beneficiaries. In the context of retirement assets, certain types of trusts—such as see-through trusts or accumulation trusts—may be incorporated into estate plans.

These structures may be used to address considerations such as:

• Coordinating asset distributions over time
• Asset protection considerations
• Multigenerational planning objectives

However, many trusts that inherit retirement accounts remain subject to the 10-year distribution rule, and trust design must be coordinated carefully with beneficiary designations and estate planning documents.

Integrating Retirement Assets Into Legacy Planning

Retirement accounts often represent one of the largest components of a family’s balance sheet. As a result, the SECURE Act’s 10-year rule has become an important topic within broader discussions around wealth transfer and legacy planning.

Planning conversations often involve evaluating multiple factors together, including:

• Current and projected income tax considerations
• Retirement income needs during the account owner’s lifetime
• Estate planning structures and beneficiary designations
• Family governance and long-term wealth transition goals
• Charitable planning priorities

Because these factors can vary significantly across families, planning strategies are typically evaluated within the context of each family’s broader financial and estate planning framework.

The SECURE Act’s 10-year rule has changed how many retirement assets pass to the next generation. While the rule creates new planning considerations, it also highlights the importance of coordinating retirement accounts with tax planning, estate planning, and long-term family wealth strategies.

For many families, thoughtful planning begins with understanding how retirement assets interact with broader financial goals and legacy objectives.

Professionals who focus on integrated wealth and legacy planning—such as the teams at Omni 360 Advisors and Omni Legacy Law—often help business owners and multigenerational families explore how retirement assets may fit within a comprehensive planning framework.

The information provided is educational and general in nature and is not intended to be, nor should it be construed as, specific investment, tax, or legal advice.