The SECURE Act has dramatically changed the rules for inherited retirement accounts. Under the new regulations, the ability to “stretch” IRA distributions over a lifetime for most non-spouse beneficiaries was replaced with a 10-year distribution requirement. While this simplified the rules in some ways, it also accelerated taxation for many heirs — particularly adult children in their peak earning years.

However, the 10-year rule is not always the only outcome.

In certain situations, intentionally naming a non-designated beneficiary — such as an estate or certain types of trusts — may allow distributions to extend beyond 10 years. This strategy is highly technical and not appropriate in every case, but for the right family and tax circumstances, it can provide meaningful planning flexibility.

Below, we walk through how it works and when it may make sense to consider.

A Quick Refresher: The Post-SECURE Act Rules

Under current law, beneficiaries fall into three primary categories:

1. Eligible Designated Beneficiaries (EDBs)

These beneficiaries can still use life expectancy distributions:

Surviving spouses

Minor children (until reaching majority)

Disabled or chronically ill individuals

Beneficiaries less than 10 years younger than the decedent

2. Non-Eligible Designated Beneficiaries

This includes most adult children and other individual heirs.

They are generally subject to the 10-year rule, meaning the inherited IRA must be fully distributed by the end of the 10th year following death.

If the original IRA owner died after their Required Beginning Date (RBD), annual RMDs may also be required during years 1–9.

3. Non-Designated Beneficiaries (NDBs)

This category includes:

Estates

Charities

Certain trusts that do not qualify as “see-through” trusts

At first glance, naming a non-designated beneficiary might seem like a mistake. But depending on when death occurs, the distribution rules can differ in important ways.

The Critical Factor: Death Before or After the Required Beginning Date

The planning opportunity hinges on whether the IRA owner dies before or after their Required Beginning Date (currently age 73 under SECURE 2.0).

If Death Occurs Before the RBD

A non-designated beneficiary is subject to the 5-year rule, meaning the entire IRA must be distributed within five years.

In most cases, this is less favorable than the 10-year rule.

If Death Occurs After the RBD

This is where planning becomes more nuanced.

If the IRA owner dies after their RBD and names a non-designated beneficiary, distributions may be taken over the decedent’s remaining single life expectancy, determined in the year of death.

In some cases, that remaining life expectancy can exceed 10 years.

This creates the potential to extend distributions beyond the standard 10-year rule that would otherwise apply to adult children.

Why Would Someone Intentionally Name a Non-Designated Beneficiary?

While this approach is not common, there are specific circumstances where it may be worth evaluating.

1. Extending Distributions Beyond 10 Years

Consider an 82-year-old IRA owner who passes away. Based on IRS tables, their remaining life expectancy might be approximately 10–12 years.

If an adult child is named directly, the account must be fully distributed within 10 years.

However, if the estate (a non-designated beneficiary) is named and death occurred after the RBD, distributions could instead follow the decedent’s remaining life expectancy — potentially extending beyond 10 years and smoothing taxable income.

While the extension may only be modest in some cases, even a few additional years of deferral can create meaningful tax savings for high-income heirs.

2. Managing Tax Bracket Compression for Heirs

Many beneficiaries inherit retirement accounts during their peak earning years — often in their 40s, 50s, or early 60s.

Forcing large IRA withdrawals within a 10-year window can:

Push beneficiaries into higher marginal brackets

Increase Medicare premiums (IRMAA)

Reduce eligibility for certain deductions and credits

Extending distributions may reduce annual taxable income spikes and improve overall after-tax results.

3. Coordinating with Estate Planning Goals

There are situations where naming an estate or a carefully drafted accumulation trust may align better with broader estate planning objectives, such as:

Asset protection considerations

Blended family planning

Control over distribution timing

Coordinating income streams among multiple beneficiaries

In these cases, the distribution period becomes one component of a larger strategy.

A Simplified Case Example

Assume:

82-year-old IRA owner

$2,000,000 traditional IRA

Adult child in the top marginal tax bracket

Death occurs after RBD

Option 1: Adult Child Named Directly

10-year rule applies

Potentially large distributions within a compressed time frame

Higher annual taxable income

Option 2: Estate Named as Beneficiary (After RBD)

Distributions over decedent’s remaining life expectancy (e.g., 11–12 years)

Slightly extended deferral

Potential smoothing of income

The tax savings will depend on the beneficiary’s marginal rate, other income sources, and state tax considerations. But the difference can be material in high-income households.

Important Limitations and Risks

This strategy is not broadly applicable and carries real tradeoffs.

If Death Occurs Before RBD

The 5-year rule applies to non-designated beneficiaries — often worse than the 10-year rule.

Probate Exposure

Assets payable to an estate may be subject to probate, depending on structure and state law.

Trust Tax Rates

If an accumulation trust is used and income is retained, compressed trust tax brackets may apply.

Reduced Flexibility

Individuals can disclaim inherited IRAs. Estates generally cannot create the same flexibility.

Fact-Specific Analysis Required

This strategy only works in certain age and timing scenarios. It is not a universal solution.

When This Strategy May Be Worth Exploring

The IRA owner is well past their RBD

Remaining life expectancy exceeds 10 years

Beneficiaries are in high tax brackets

The IRA represents a large portion of the estate

Planning is coordinated between tax, financial, and estate professionals

When It Likely Does Not Make Sense

Death expected before RBD

Roth IRAs (which already grow tax-free and have no lifetime RMDs)

Smaller account balances

Beneficiaries in lower tax brackets

Simple estate plans where probate avoidance is a priority

The Bigger Picture: Post-SECURE Act Planning Is More Complex

The elimination of the lifetime “stretch IRA” shifted the focus of retirement planning from beneficiary optimization to lifetime tax strategy.

Today’s planning conversations often include:

Roth conversion analysis

Strategic RMD management

Charitable planning strategies

Trust design considerations

Beneficiary designation reviews after age 73

In some cases, intentionally naming a non-designated beneficiary may be one of several tools used to improve overall after-tax outcomes.

Final Thoughts

The 10-year rule is the default for most inherited IRAs — but it is not always the only possible result.

In certain post-RBD situations, naming a non-designated beneficiary such as an estate or qualifying trust may allow distributions over the decedent’s remaining life expectancy, potentially extending beyond 10 years.

Because the rules are technical and highly fact-dependent, this strategy should only be evaluated as part of a coordinated tax and estate planning process.

If you would like to review your beneficiary designations or evaluate how your retirement accounts fit into your broader estate plan, our team would be happy to help.

Extending Beyond the 10-Year Rule: Strategic Considerations for Inherited IRA Beneficiaries