When an IRA owner dies without a designated beneficiary on the account, the IRA passes by default, usually to the owner's estate. The estate is not a designated beneficiary in the IRS sense, so the account loses access to the SECURE Act 10-year rule and the eligible-designated-beneficiary exceptions.
The result is a much shorter distribution runway, probate exposure, and a tax bill that arrives faster than it had to.
Try the Free Inherited IRA RMD CalculatorWhere the account actually goes
Each IRA custodian's account agreement spells out the default. Most agreements pass the IRA to the surviving spouse if there is one, then to surviving children equally, then to the estate. Some agreements name only the estate as default. The custodian's terms — not state intestacy law — usually control.
When the default sends the IRA to the estate, the IRA becomes an estate asset. The executor handles distribution under the will, or under state intestacy rules if there is no will. Probate is typically required, the IRA value becomes part of the public probate record, and executor and attorney fees apply.
Pull the IRA owner's account agreement before assuming the worst. Many custodians' default cascades land on a person, not the estate.
The distribution timeline shrinks
When an estate is the beneficiary — by default or by design — the IRA is treated as having no designated beneficiary. The post-2019 10-year rule does not apply. Instead, two tighter rules govern based on whether the IRA owner had reached their required beginning date.
If the IRA owner died before their required beginning date, the entire balance must be distributed by December 31 of the fifth year after death. This is the "5-year rule," and it applies regardless of who the eventual heirs are.
If the IRA owner died on or after their required beginning date, distributions are taken over the deceased owner's remaining single life expectancy. For an IRA owner in their 80s, that calculated runway is typically shorter than ten years.
What heirs can and cannot do
Heirs receiving the IRA through the estate can sometimes have the account distributed out of the estate to inherited IRAs in their own names, but only if the executor and custodian both cooperate, and only with the original 5-year or life-expectancy schedule preserved. The runway does not extend. The 10-year rule does not become available.
This is the key planning point: the time to fix a missing beneficiary designation is before death. A beneficiary form takes minutes. The estate workaround takes months and shrinks the tax-deferred window for everyone.
See the inherited-IRA pillar hub for the broader beneficiary framework, How It Works for what SimpleRMD does, and the main RMD hub for the underlying RMD rules. For trust-as-beneficiary considerations — another path that can produce non-designated-beneficiary treatment if drafted incorrectly — see can a trust be the beneficiary of an IRA.
This article is for informational purposes only and does not constitute tax, legal, or financial advice. IRS rules and tax laws are subject to change. Consult a qualified tax professional or financial advisor for guidance specific to your situation. SimpleRMD is a calculation and tracking tool — not a financial advisory service.
Sources: IRS Final Regulations T.D. 10001 (July 2024). IRS.gov (Publication 590-B, "5-Year Rule" and "Death of an IRA Owner"). IRS Notices 2022-53, 2023-54, 2024-35. SECURE Act of 2019 (Pub. L. 116-94). SECURE 2.0 Act of 2022 (Pub. L. 117-328). Rules confirmed current as of May 2026.