Inheriting an IRA or 401(k) in Florida: the 10-year rule, spouse choices, taxes and probate

An IRA or 401(k) is paid to the person named on the account's beneficiary designation. It is not part of the probate estate unless the estate is the beneficiary. Federal law sets how fast the beneficiary must withdraw the money, and the answer depends on who the beneficiary is and when the owner died. Florida adds no income, estate or inheritance tax.

• Probate: "Estate" means the property of a decedent that is the subject of administration (§ 731.201, Fla. Stat. (2026)). An account with a living named beneficiary is paid under the account contract. An account payable to the estate is paid into the estate.
• Deadline for most adult beneficiaries: the entire balance must be withdrawn by December 31 of the year containing the 10th anniversary of the owner's death (Publication 590-B (2025); 26 U.S.C. § 401(a)(9)(H)). The rule applies to owners who died after December 31, 2019.
• Surviving spouse: may treat the inherited IRA as the spouse's own, or remain a beneficiary (Publication 590-B (2025)).
• Florida tax: no tax on estates, inheritances or the income of natural persons beyond the federal credit amounts (Art. VII, § 5(a), Fla. Const.). Florida has had no estate tax for deaths after 2004 (Florida Department of Revenue).
• Federal tax: withdrawals from a traditional account are taxable income to the beneficiary. There is no step-up in basis for income in respect of a decedent (26 U.S.C. § 1014(c); Publication 590-B).
• Missed withdrawal: an excise tax of 25 percent of the shortfall, reduced to 10 percent if corrected within the correction window (26 U.S.C. § 4974).

Which distribution rule applies

The designated beneficiary is determined on September 30 of the year after the owner's death. A beneficiary who disclaimed or was paid out in full before that date is ignored (Publication 590-B). The rule for each kind of beneficiary is in Table 1. The same structure applies to defined contribution plans such as a 401(k) under 26 C.F.R. § 1.401(a)(9)-5, but the plan document can be more restrictive, so confirm the options with the plan administrator.

Deadlines by year of death

The 10-year deadline is December 31 of the year containing the 10th anniversary of death. Publication 590-B gives an example: an owner who dies in 2025 means the account is fully distributed by December 31, 2035 (Publication 590-B (2025)). Table 2 applies the same rule to other years.

• Year of death: if the owner died on or after the required beginning date, the beneficiaries are responsible for taking the owner's required distribution for the year of death (Pub. 590-B).
• Excise tax: a shortfall in a required distribution is taxed at 25 percent. If the shortfall is withdrawn and a return reflecting the tax is filed during the correction window, the rate is 10 percent. A waiver can be requested for reasonable error on Form 5329 (Pub. 590-B, Excess Accumulations; 26 U.S.C. § 4974).
• 2024 relief: the IRS did not assert the excise tax in 2024 for certain missed required distributions under Notice 2024-35 (Pub. 590-B, Reminders).

Spouse, non-spouse and the transfer method

• Spouse who treats the IRA as own. The spouse is treated as the owner and determines required distributions as the owner would. If the spouse becomes owner in the year the owner died, the owner's required distribution for that year must still be taken (Pub. 590-B, IRA Beneficiaries).
• Non-spouse beneficiary. The IRA cannot be treated as the beneficiary's own. No contributions and no rollovers into or out of it are allowed. The money can move by trustee-to-trustee transfer into an IRA set up in the name of the deceased owner for the benefit of the beneficiary (Pub. 590-B, Inherited from someone other than spouse).
• Cashing out. A distribution is taxable income in the year received. A spouse can roll a distribution to another traditional IRA within the allowed time and avoid including it in income, if it is not a required distribution (Pub. 590-B).
• 401(k) and similar plans. A defined contribution plan that relies on the exception in 26 U.S.C. § 401(a)(11)(B)(iii) must provide that the benefit is payable in full to the surviving spouse or, with the spouse's consent in the form 26 U.S.C. § 417(a)(2) requires, to a designated beneficiary.

Roth IRAs

• Taxes. A distribution to a beneficiary is a qualified distribution, and tax-free, if the 5-year period beginning with the first tax year of a Roth contribution has been met. If it has not, the distribution is generally included in the beneficiary's income as it would have been included in the owner's (Pub. 590-B, Roth IRAs: Distributions After Owner's Death).
• Timing. The minimum distribution rules apply as though the owner died before the required beginning date. The entire interest must be distributed by the end of the 5th or 10th year after death unless an eligible designated beneficiary takes life-expectancy payments (Pub. 590-B).
• Spouse. A sole-beneficiary spouse can delay distributions until the decedent would have reached the applicable age, or treat the Roth IRA as the spouse's own (Pub. 590-B).

Taxes in Florida and federal

Probate, creditors and former spouses

• Named beneficiary. The designation and account terms control. The estate receives the account only if it is named, or if the account terms direct payment to the estate when no named beneficiary survives.
• Creditors of the beneficiary. A fund or account that qualifies under § 222.21(2)(a) stays exempt after the owner's death by reason of a direct transfer or eligible rollover to an inherited IRA (§ 222.21(2)(c)). The exemption does not apply to a qualified domestic relations order alternate payee or to a surviving spouse's elective share and contribution order (§ 222.21(2)(d)).
• Former spouse. A beneficiary designation of a former spouse, made before the marriage was judicially dissolved, is void and the asset passes as if the former spouse predeceased. This covers IRAs and employee benefit plans, subject to exceptions in subsection (4), including where controlling federal law provides otherwise (§ 732.703(2), (3), (4)).
• Estate as beneficiary. The account is paid to the personal representative and administered as estate property. For an owner who died before the required beginning date the 5-year rule applies (Pub. 590-B, 5-year rule).

Disclaiming an inherited account

A disclaimer is an irrevocable, unqualified refusal to accept the interest. The federal rule that treats the interest as never received by the disclaimant requires a writing received by the transferor, the legal representative or the holder of legal title no later than 9 months after the date of the transfer (or the date the person reaches 21, if later), no acceptance of the interest or any benefits, and passage of the interest without the disclaimant's direction (26 U.S.C. § 2518(b)).

Florida adds form rules. The disclaimer must be in writing, declared as a disclaimer, describe the interest, be signed, and be witnessed and acknowledged as a deed is, and the original must be delivered or filed as § 739.301 provides (§ 739.104(3)). Unless the instrument says otherwise, the disclaimed interest passes as if the disclaimant died immediately before the interest was created (§ 739.201(3)(a)). Where a disclaimed retirement account goes depends on the designation and the account terms; the instrument creating the interest can direct disclaimed interests (§ 739.201(2)), so read both before disclaiming.

Steps for a beneficiary

• 1. Order certified death certificates from the Florida Department of Health. The custodian will ask for one. A certified copy is prima facie proof of death (§ 731.103(1)).
• 2. Do not withdraw or retitle until you know the rule. A spouse who contributes to the IRA, or misses a required distribution, is treated as having made the IRA the spouse's own (Pub. 590-B).
• 3. Find the owner's date of birth and required beginning date. They decide whether the owner died before or on or after it, which sets annual versus year-10 distributions.
• 4. Decide on a disclaimer within 9 months of the death if the account should pass to the contingent beneficiary (26 U.S.C. § 2518(b)).
• 5. Transfer to an inherited IRA by trustee-to-trustee transfer if you are not the spouse (Pub. 590-B).
• 6. Split shared accounts by December 31 of the year after the year of death so each beneficiary uses a separate account (Pub. 590-B, Separate accounts).
• 7. Calendar each year's required distribution and the final date from Table 2. Report taxable distributions on Form 1040; use Form 5329 for any shortfall (Pub. 590-B).