A Deadline Fixed by the Calendar
The payout rules for an inherited IRA depend on who the beneficiaries are — but the IRS does not read the form on the date of death. IRS Publication 590-B is explicit: "Generally, the designated beneficiary is determined on September 30 of the calendar year following the calendar year of the IRA owner's death."
For heirs of an owner who died in 2025, that date is September 30, 2026. Nothing arrives in the mail to announce it.
Why the Date Matters
An individual named on the form is a designated beneficiary. Most fall under the 10-year rule: the account must be emptied "by the end of the 10th year following the year of the account owner's death," with annual withdrawals in years one through nine if the owner had reached their required beginning date — April 1 of the year after turning 73, or 75 for those born in 1960 or later. Spouses, minor children, the disabled or chronically ill, and anyone not more than 10 years younger than the owner get better terms still.
An estate, a charity, or a non-qualifying trust is a non-designated beneficiary, and the rules are harsher. If the owner died before the required beginning date, the IRS says the beneficiary must "take entire balance by end of 5th year following year of death." If the owner died after it, distributions run over the owner's own remaining life expectancy, reduced by one each year.
The trap is a mixed form: 45% to each of two children, 10% to a church. If the church still holds its share on the determination date, the whole account is tested as though it had no designated beneficiary — and the children can be pushed from ten years down to five.
The Two Ways Off the Form
Publication 590-B names the exits. A person who was a beneficiary at death "but isn't a beneficiary on September 30 of the calendar year following the calendar year of the owner's death (because, for example, the beneficiary disclaimed entitlement or received their entire benefit), won't be taken into account in determining the designated beneficiary."
Cash-out. Pay the charity its full share before September 30. A charity owes no income tax on the distribution, so paying early costs nothing. For 2025 deaths, this option is still open.
Disclaimer. A qualified disclaimer under 26 CFR § 25.2518-2 must be "irrevocable and unqualified," in writing, and delivered within nine months of the transfer. The disclaimant "must not have accepted the interest disclaimed or any of its benefits." For most 2025 deaths, that window has already closed; only late-December deaths still have it.
A third date follows. Separate accounts for multiple individual beneficiaries must be "established by the end of the year following the year of the IRA owner's death" — December 31, 2026.
Where Practitioners Disagree
A thread on Ed Slott and Company's forum records a split: one reading holds that paying the charity by December 31 cures the problem through the separate-account rule, while others insist the charity must be out "by Sept 30th of the year after death." Ascensus notes the 2024 final regulations confirmed separate accounting can decide whether the 10-year rule applies to a given beneficiary. The conservative course costs nothing: pay the non-individual share before September 30, then split the rest by December 31.
Practical Takeaways
- Inherited in 2025? Check the original form now. If any share went to a charity, estate, or trust, have the custodian pay it out before September 30, 2026.
- Do not take a distribution from a share you may want to disclaim. A withdrawal is an acceptance and voids the disclaimer.
- Owners with mixed wishes should keep the charity on its own IRA, which removes the question entirely.
- A beneficiary who dies before September 30 without disclaiming "continues to be treated as a beneficiary." The date is a snapshot, not a re-designation.
Sources: IRS Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs); IRS – Required minimum distributions for IRA beneficiaries; IRS – Retirement topics: Beneficiary; 26 CFR § 25.2518-2, Requirements for a qualified disclaimer; Ascensus – Washington Pulse: IRS Releases Final RMD Regulations (TD 10001, July 19, 2024); Ascensus – September 30 Deadline Key to Beneficiary Distributions; Ed Slott and Company – IRA discussion forum on beneficiaries split between individuals and a charity