‘I’m the executor’: My two siblings and I inherited an IRA. Can we just cash it out?
News Source
β’Sat, 12 Sep 2026 15:00:00 GMT
π° What Happened
A reader who is the executor of an estate asked MarketWatch's advice column a common question. They and their two brothers or sisters inherited an IRA. Can they simply cash it out?
The answer is yes, they can take the money, but they will owe tax on it. The column explained how the rules work for heirs who are not a husband or wife.
π The Backstory
An IRA is a US retirement savings account. Money paid in is not taxed at the time, but withdrawals are taxed as income. So the tax bill comes when the money is taken out.
A 2019 law called the SECURE Act changed the rules. Most sons, daughters and other heirs who are not spouses must empty an inherited IRA within 10 years, and new rules call for yearly payments in many cases. Taking it all at once can push a person into a higher tax bracket.
π― Why It Matters
Cashing out fast can mean one huge tax bill in a single year. Spreading it out can save thousands, but each sibling still pays tax on their own share.
A reader who is the executor of an estate asked MarketWatch's advice column a common question. They and their two brothers or sisters inherited an IRA. Can they simply cash it out?
The answer is yes, they can take the money, but they will owe tax on it. The column explained how the rules work for heirs who are not a husband or wife.
An IRA is a US retirement savings account. Money paid in is not taxed at the time, but withdrawals are taxed as income. So the tax bill comes when the money is taken out.
A 2019 law called the SECURE Act changed the rules. Most sons, daughters and other heirs who are not spouses must empty an inherited IRA within 10 years, and new rules call for yearly payments in many cases. Taking it all at once can push a person into a higher tax bracket.
Cashing out fast can mean one huge tax bill in a single year. Spreading it out can save thousands, but each sibling still pays tax on their own share.