When someone passes away without naming a beneficiary on their IRA, the outcome for their heirs can be complicated. A new IRS Ruling issued in June 2026 addresses exactly this situation and provides important guidance for families navigating Inherited IRAs through an estate.

If you are an executor, an estate attorney, or someone who has inherited an IRA through a deceased family member’s estate rather than as a named beneficiary, this ruling is worth understanding.

What Is a Private Letter Ruling?

A Private Letter Ruling, or PLR, is a written determination issued by the IRS in response to a specific taxpayer’s request for guidance on how tax law applies to their situation. It is not a broadly binding precedent, meaning it applies only to the taxpayer who requested it. However, PLRs are publicly released and are widely used by tax practitioners as a window into how the IRS interprets the law in specific factual circumstances.

PLR 202624001, released June 12, 2026, addresses what happens when an IRA owner dies after their required beginning date for required minimum distributions without having named a beneficiary on the account.

The Situation the Ruling Addresses

The scenario at the center of this ruling is more common than most families realize: A parent passes away, already past the age for required minimum distributions, with a traditional IRA and no beneficiary on file.

The IRA custodian has no record of a designation, so the estate becomes the default beneficiary.

The deceased had a will naming three children equally, and a probate court appointed one child as executor.

With the estate now holding the IRA, the executor turned to the IRS with a straightforward but consequential question: can this account be divided into three separate Inherited IRAs, and how do RMDs work from here?

What the IRS Ruled

The IRS ruled favorably on all four questions the executor raised. Here is what each ruling means in plain terms.

The IRA can be split into three separate Inherited IRAs. Even though the estate, not the children individually, was the named beneficiary of the IRA, the executor can divide the account into three equal parts and transfer each portion into a separate Inherited IRA for each child. This is done through trustee-to-trustee transfers, meaning the funds move directly from the original IRA custodian to the new Inherited IRA without passing through the hands of the beneficiaries.

Each account qualifies as an Inherited IRA. The three separate accounts, titled in the decedent’s name for the benefit of each child, qualify as Inherited IRAs under IRC Section 408(d)(3). This matters because Inherited IRAs have specific rules governing how and when distributions must be taken.

Required minimum distributions are based on the decedent’s remaining life expectancy. Because the decedent died after their required beginning date and without a designated beneficiary, distributions from the Inherited IRAs must continue at least as rapidly as they were being taken at the time of death. Specifically, RMDs are calculated using the decedent’s remaining life expectancy based on the Single Life Table, determined by the decedent’s age in the year of death and reduced by one for each subsequent calendar year.

The transfers are not taxable distributions. Moving the IRA assets from the estate’s interest in the original IRA into the three separate Inherited IRAs via trustee-to-trustee transfer does not trigger a taxable event. The funds are not treated as a distribution to the beneficiaries and do not constitute a rollover.

Summary of PLR 202624001

Why This Matters

The ruling clarifies something that trips up many families and even some advisors: the absence of a named beneficiary does not mean the children are out of luck. It means the path to getting the funds into their hands is more complex, but it is still available.

Without this kind of IRS guidance, executors in this situation might assume the IRA must be fully distributed to the estate and then passed to the heirs through probate, triggering immediate taxation. The ruling confirms that a more favorable outcome is possible through proper structuring.

There is also an important practical implication around required minimum distributions. When an estate is the beneficiary and the decedent died after their required beginning date, the beneficiaries cannot use their own life expectancies to stretch distributions. They are locked into the decedent’s remaining life expectancy schedule. This is generally a less favorable outcome than what a named designated beneficiary would receive, which is one of the reasons naming a beneficiary on every retirement account is so important.

The Bigger Lesson: Name Your Beneficiaries

This ruling resolves a difficult situation, but the situation itself was entirely preventable.

When an IRA owner fails to name a beneficiary, the account defaults to the estate. That creates a probate process, potential delays, and in most cases a less favorable distribution schedule for the heirs. A properly named designated beneficiary bypasses probate entirely, allows for more flexible distribution options, and in many cases gives heirs significantly more time to stretch distributions and continue tax-deferred or tax-free growth.

If you have an IRA and have not reviewed your beneficiary designations recently, this ruling is a good reminder to do so. Life changes, including marriages, divorces, births, and deaths, can make old designations outdated or create gaps like the one at the center of this ruling.

What to Do If You Are in This Situation

If you are the executor of an estate that has inherited an IRA, or a beneficiary who is receiving an IRA through an estate rather than as a named beneficiary, the steps outlined in this ruling provide a roadmap.

The key requirements are:

• Inherited IRAs must be titled correctly in the decedent’s name for the benefit of each beneficiary
• Transfers must be done as trustee-to-trustee transfers, not as distributions to the estate
• Required minimum distributions must begin and must follow the decedent’s remaining life expectancy schedule
• Each beneficiary’s separate account must maintain separate accounting from the date of division

Getting the titling and transfer mechanics right from the start is essential. Errors in how an Inherited IRA is set up or distributed can trigger unintended tax consequences that are difficult to reverse.

If you have questions about an Inherited IRAs situation or want to ensure the account is structured correctly, IRA Financial’s team of in-house tax experts can help.