Your IRA & Estate Plan: Five Important Considerations

• IRA beneficiary designations typically determine who receives those assets, so they should be reviewed alongside your will, trusts, and broader estate plan
• Inherited IRAs can carry important tax and distribution considerations, especially for non-spouse beneficiaries
• Coordinated IRA planning can help align retirement income, tax efficiency, charitable goals, and the legacy you want to leave

Individual retirement accounts can be an important part of a comprehensive estate plan, but they require careful review. Because IRA assets typically transfer by beneficiary designation rather than under the terms of a will, those designations should be considered alongside your tax strategy, distribution planning, and broader legacy goals.

A well-coordinated estate plan accounts for how each asset will be owned, taxed, and transferred. That includes wills and trusts, but it also includes assets that pass outside of those documents, such as retirement accounts.

IRAs deserve particular attention because their rules can affect both the timing and taxation of distributions. The way an IRA is structured today may influence how efficiently wealth is transferred to family members, charitable organizations, or other intended beneficiaries.

Periodic review can help ensure your beneficiary designations and planning assumptions continue to reflect changes in your family, finances, tax environment, and long-term objectives.

For many individuals and families, an IRA is more than a retirement savings vehicle; it is also a meaningful component of a legacy plan.

Thoughtful IRA planning can help align retirement income needs, tax efficiency, family priorities, and charitable intentions within a cohesive estate planning strategy.

A traditional individual retirement account, or IRA, is a tax-advantaged account designed to help individuals save and invest for retirement.

Broadly, during your earning years, contributions may be tax-deductible and investments grow tax-deferred. Then when withdrawals are made in retirement, they are taxed as ordinary income.

A Roth IRA is also a tax-advantaged account, but the timing of the tax advantage is reversed: There is no tax deduction for contributions, and contributions and earnings may be withdrawn tax-free in retirement.

The following considerations can help inform a more integrated approach to IRA and estate planning.

IRA assets generally pass according to the beneficiary designation on file with the account custodian, not automatically under the terms of your will or revocable trust. Regularly reviewing those designations can help ensure they remain aligned with the rest of your estate plan and accurately reflect your wishes.

Different types of beneficiaries may be subject to different income tax and distribution rules. Those distinctions should be considered carefully when naming or updating beneficiaries.

Spouse beneficiaries. A surviving spouse can roll an IRA into their name and delay required distributions, which provides more flexibility in cash flow, tax, and estate planning.

Non-spouse beneficiaries. Non-spouse beneficiaries need to withdraw the entire IRA within 10 years of the owner's death. This rule is new as of the 2019 SECURE Act and changed how most heirs inherit IRAs. Review your IRA beneficiaries with these new rules in mind.

Charities. As charities are exempt from income taxes, they can receive the entire account value, making traditional IRAs a powerful tool for leaving a philanthropic legacy.

Unlike most other inherited assets, traditional IRAs are funded with pretax dollars, and they do not receive a step-up in basis at death.

Therefore, every dollar distributed to heirs is generally taxed as ordinary income, which may reduce the realized value of the inheritance. Unlike traditional IRAs, Roth IRAs are generally income-tax-free to heirs, though the 10-year distribution rule discussed above still applies.

A close review can help you understand how IRA assets may be taxed and distributed, and whether your current beneficiary designations continue to support your broader planning objectives.

Taxes are only one consideration. Because creditor protection and divorce protection for inherited IRAs can vary by beneficiary and jurisdiction, the beneficiary structure may also play a role in preserving wealth.

Using a trust instead of an outright designation may create greater protection, particularly when heirs are minors, vulnerable to external risks, or unprepared to manage new wealth.

Update your trust before naming it as the beneficiary of an IRA. If your trust doesn't contain specific provisions, the IRA may be subject to distributions that are less flexible and less tax efficient.

IRA planning is not a single decision, but part of a broader strategy for retirement income, tax efficiency, and wealth transfer. Depending on your circumstances, an adviser may help you evaluate strategies such as:

• A Roth conversion
• A qualified charitable distribution
• A structured, timed distribution that balances current tax considerations against future tax exposures and the potential tax burden on your heirs

When these decisions are coordinated, your retirement assets can work more effectively within your overall financial and wealth plan. IRA planning is most effective when it is intentional, coordinated, and revisited over time. A thoughtful review today can help ensure your retirement assets support the legacy you want to leave tomorrow.

A version of this article was published in Kiplinger on May 7, 2026.

Explore our Wealth Planning services to learn how thoughtful planning can help protect your family, preserve your assets, and support your long-term goals.

A version of this article was published in Kiplinger on February 11, 2026.

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.

When taking withdrawals from an IRA before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax. All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account.

There is no assurance that any investment, financial, or estate planning strategy will be successful. Estate planning strategies require consideration of the suitability based on individual objectives, financial situation, and particular needs.

Wilmington Trust is not authorized to and does not provide legal, accounting, or tax advice. Our advice and recommendations provided to you are illustrative only and subject to the opinions and advice of your own attorney, tax advisor, or other professional advisor.

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