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Estate Planning

Inherited IRAs, step-up in basis, and what California families actually need

Estate planning is not about estate tax for most California families. With the federal exemption where it is, the questions that matter are different, namely who inherits what, how an inherited individual retirement account (IRA) has to be emptied, what happens to the basis of a home in San Mateo or Roseville, and whether the documents in the drawer still say what you think they say.

The guides here start from those questions. The inherited IRA guide walks through the SECURE Act 2.0 rules and the 10 year clock. The California estate planning guide covers what a family with $1 million to $8 million actually needs in 2026. Both are written for the person who just became responsible for someone else's money and wants to get it right.

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Estate Planning

Inherited IRA Planning Guide: Navigating SECURE Act 2.0 Rules, RMDs, and Tax Strategies

What happens when you inherit an IRA, how the SECURE Act 2.0 10-year rule and RMDs work, and how step-up in basis applies to inherited homes and accounts, including California's community property rules.

  • Most non-spouse beneficiaries who inherit an IRA after December 31, 2019 must empty the account within 10 years, and may also owe annual required minimum distributions during years 1 through 9 if the original owner had already reached their required beginning date.
  • Eligible designated beneficiaries, including surviving spouses, minor children of the account owner, and disabled or chronically ill individuals, may stretch distributions over their own life expectancy instead of using the 10-year rule.

Nyle Bayer · Published · 14 min read

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For general education only, not individualized tax or investment advice. Up Capital Management is a Registered Investment Adviser.