Most IRAs avoid probate because they pass directly to whoever you named as beneficiary

An IRA does not go through probate if you have named a beneficiary on the account. The money moves directly from the IRA custodian (your bank, brokerage, or investment firm) to that person, bypassing the court process entirely. This happens whether the IRA is traditional, Roth, SEP, or straightforward—the beneficiary designation is what matters, not the account type.

The only time an IRA enters probate is when no beneficiary was ever named, or when the named beneficiary died before you did and you never updated the form. In those cases, the IRA becomes part of your estate and the court decides who gets it based on your will or your state's intestacy laws. This is rare but fixable.

Because beneficiary designations override your will, an IRA you leave to your adult child will go to that child even if your will says everything goes to your spouse. The same applies in reverse: if your will names one person but your IRA names another, the IRA goes to whoever you named on the form.

Key Takeaways

  • IRAs with a named beneficiary pass directly to that person outside of probate, regardless of what your will says.
  • If you have no beneficiary on file or the named beneficiary is deceased, the IRA becomes part of your estate and goes through probate.
  • Beneficiary designations are the controlling document—they override your will for that account.
  • You can name multiple beneficiaries, split the account between them, or name a trust as beneficiary if your situation is complex.
  • After inheriting an IRA, the beneficiary must follow specific withdrawal rules that depend on their relationship to the deceased account holder.

How the beneficiary designation controls where the money goes

When you open an IRA, the custodian asks you to name a beneficiary. That form—usually called a Beneficiary Designation or IRA Beneficiary Form—is a legal document separate from your will. It tells the custodian exactly who should receive the account balance when you die, and the custodian is required to honor it.

You can name one person, multiple people, a charity, or a trust. You can also split the account: for example, 60% to your spouse and 40% to your child. The custodian has a record of this form, and when you die, they verify the beneficiary and transfer the money. No court involvement, no waiting for probate to close.

The critical step is keeping the form current. If you marry, divorce, have children, or your circumstances change, you should review and update your beneficiary designation. Many people name a beneficiary when they open the account and never look at it again—which can mean money goes to an ex-spouse or a deceased child's estate instead of where you actually want it.

When an IRA does enter probate

An IRA goes through probate in two situations. The first is when you never named a beneficiary at all. Some older accounts or accounts opened hastily may have this gap. The second is when the person you named as beneficiary died before you did, and you did not update the form to name someone else.

In both cases, the IRA becomes part of your probate estate. The court follows your will (if you have one) or your state's intestacy laws (if you do not) to decide who inherits. This adds months to the process and can create conflict if multiple family members believe they should receive the money.

You can prevent this by checking your beneficiary form now. Contact your IRA custodian and ask them to confirm who is listed. If the form is missing, outdated, or names someone who is no longer living, update it when ready. The form itself is usually free and takes minutes to complete.

What happens to the money after the beneficiary receives it

Receiving an IRA is not the same as receiving other inherited money. The beneficiary cannot straightforward withdraw the entire balance and keep it tax-free. Instead, they must follow Required Minimum Distribution (RMD) rules that depend on their relationship to the deceased account holder and the type of IRA.

A spouse who inherits a traditional IRA can treat it as their own, roll it into their own IRA, or keep it as an inherited IRA and take distributions over their lifetime. A spouse has the most flexibility. A non-spouse beneficiary (adult child, sibling, friend, or charity) must take distributions according to a schedule set by federal tax law. The exact timeline depends on whether the original account holder had already started taking distributions and when they died.

For accounts inherited after 2019, most non-spouse beneficiaries must withdraw the entire balance within 10 years of the account holder's death. Some beneficiaries—minor children, disabled individuals, or those within 10 years of the account holder's age—have different rules. A tax professional or the IRA custodian can explain the specific requirements for each beneficiary.

Naming a trust as beneficiary and when it makes sense

Some people name a trust as the IRA beneficiary instead of naming individuals directly. This can be useful if the beneficiary is a minor, if you want to control how the money is used, or if you have a complex family situation. However, naming a trust creates additional tax and administrative complexity, and it does not avoid probate for the IRA itself—it only changes who receives the money.

If you name a trust as beneficiary, the trust becomes the legal owner of the inherited IRA. The trustee must then manage the account and take distributions according to the trust terms and federal law. This can be more expensive because trustees charge fees, and it requires the trustee to understand IRA distribution rules.

Before naming a trust as beneficiary, talk to an estate planning attorney or tax professional. In many cases, naming the individual beneficiary directly and using your will or a separate trust document to control how they use the money is simpler and cheaper.

Updating your beneficiary designation after major life changes

Your beneficiary designation should be reviewed after marriage, divorce, the birth of children, significant changes in your finances, or the death of someone you named. Many people update their will but forget to update their IRA beneficiary form, which can result in money going to an ex-spouse or a deceased child's estate instead of where you actually want it.

To update your beneficiary, contact your IRA custodian directly—do not assume your financial advisor or attorney will do it for you. Ask for a new Beneficiary Designation form, complete it, sign it, and return it to the custodian. Keep a copy for your records. Some custodians allow you to update beneficiaries online; others require a paper form.

If you are unsure whether your current beneficiary designation is still appropriate, write down who is named and review it with a family member or advisor. This takes 15 minutes and can prevent years of family conflict or unintended outcomes after your death.

The difference between IRAs and other retirement accounts

IRAs behave the same way as 401(k)s, 403(b)s, and other employer-sponsored retirement plans regarding beneficiaries: they all pass directly to the named beneficiary outside of probate. However, the rules for what the beneficiary must do with the money can differ slightly depending on the account type and when the original account holder died.

Life insurance policies and payable-on-death (POD) bank accounts work the same way—they skip probate and go directly to the named beneficiary. Wills and trusts do not override these designations. If you have multiple accounts with different beneficiaries, make sure each one reflects your actual wishes and that the names and Social Security numbers are correct.

Frequently Asked Questions

What if I name my estate as the IRA beneficiary?

If you name your estate as the beneficiary, the IRA goes through probate because it becomes part of your probate estate. This is almost never a good idea. Name a person, charity, or trust instead. If you have no one to name, a charity is usually better than naming your estate.

Can I change my beneficiary after I am diagnosed with a terminal illness?

Yes, you can change your beneficiary at any time while you are alive, as long as you are mentally competent to do so. There is no waiting period or restriction based on your health. Contact your custodian and submit a new form. The change takes effect when the custodian processes it.

Do I need a lawyer to update my IRA beneficiary?

No. You can update your beneficiary directly with your custodian using their form. A lawyer is helpful if your situation is complex (multiple marriages, special needs beneficiaries, large accounts) or if you want to name a trust, but a straightforward update to name a spouse or adult child requires no legal help.

What happens if my beneficiary is in another country?

A non-U.S. citizen beneficiary can inherit an IRA, but they face different tax rules and may owe U.S. taxes on the distributions. The custodian may require additional documentation. Consult a tax professional who handles international accounts before naming a foreign beneficiary.

If I have multiple IRAs, do I need the same beneficiary on all of them?

No. You can name different beneficiaries on different IRAs. Some people split their accounts intentionally—for example, one IRA to a spouse and another to a child. Just make sure you have documented your intention clearly and that each custodian has the correct form on file.