Her Son Has a Disability. When She Dies, He Can Stretch Her IRA Over His Lifetime Instead of Emptying It in 10 Years, if the Right Paperwork Reaches the Custodian in Time

Parents of a son with a disability tend to come back to the same question: what happens to the money once they’re gone? Part of the answer may already be sitting in the parent’s IRA. Under federal tax law, a disabled or chronically ill child who inherits an IRA can count as an eligible designated beneficiary.

That status lets him take withdrawals over his own life expectancy, so he isn’t forced to empty the account within 10 years. This inherited IRA stretch for disabled beneficiaries is still on the books. It also comes with paperwork rules and benefits eligibility rules.

A Lifetime Payout Most Heirs Lost After 2019

When an IRA owner dies in a tax year beginning after December 31, 2019, most beneficiaries have to take everything by the end of the 10th year after death. A short list of people are exempt from that deadline. Eligible designated beneficiaries can spread required withdrawals over their life expectancy, which for a younger adult child can mean decades of smaller yearly payouts.

Where the Rule Sits in the Tax Code

The list is in 26 U.S.C. § 401(a)(9)(E)(ii). It covers a surviving spouse, the owner’s minor child, a disabled individual, a chronically ill individual, and anyone not more than 10 years younger than the owner. Qualification is determined as of the date the owner dies. “Disabled” uses the definition in 26 U.S.C. § 72(m)(7).

In plain words, the person can’t do any “substantial gainful activity” (meaningful paid work) because of a medically documented physical or mental condition that’s expected to cause death or to last a long, open-ended time. Treasury regulations add a separate test for beneficiaries under age 18 (26 CFR 1.401(a)(9)-4(e)(4)). Social Security sets the 2026 substantial gainful activity threshold for non-blind beneficiaries at $1,690 a month.

Who Qualifies and Who Gets Left Out

A son who meets the disability or chronic illness definition on the day his mother dies qualifies. A son who doesn’t meet either definition on that day is treated like any other adult child and falls under the 10-year rule. The stretch also stops with him. Whoever inherits what’s left after his death has to empty the account within 10 years under § 401(a)(9)(H)(iii).

How a Stretch Changes the Yearly Tax Bill

Here’s a simple example with stated assumptions: a $300,000 IRA, no investment growth, and equal withdrawals. Spread over 10 years, that’s about $30,000 a year. With an assumed 50-year life expectancy, the first-year withdrawal is about $6,000. The real divisor comes from the Single Life Expectancy table in Appendix B of Publication 590-B. For 2026, single filers pay 10% on income up to $12,400, and the 22% rate starts above $50,400. Smaller withdrawals can keep more of each one in lower brackets.

Benefits Risk That Can Undo Everything

The 2026 resource limit is $2,000 for an individual getting Supplemental Security Income, which would apply to her son. An IRA left to him directly, plus the withdrawals from it, can count against SSI and Medicaid eligibility. Medicaid rules vary by state. The usual fix is a supplemental needs trust named as the IRA beneficiary.

That kind of trust can still use the lifetime stretch. Under § 401(a)(9)(H)(iv), an “applicable multi-beneficiary trust” qualifies when no one other than the disabled or chronically ill beneficiary has any right to the account until he dies. The IRS calls this a “complicated area of the tax law,” and families usually have a special needs attorney draft the trust.

Paperwork Steps Families Usually Take

1. Families typically check the IRA’s beneficiary designation form. It should name the son or the trust, whichever matches the attorney’s plan.
2. Families often ask the custodian how it handles disabled beneficiaries. Under 26 CFR 1.408-8(b)(4)(i), the disability documentation described in § 1.401(a)(9)-4(e)(7) doesn’t have to go to an IRA trustee or custodian. Custodians may still require proof on their own forms.
3. A 401(k) is handled separately. For employer plans, the documentation is due to the plan administrator by October 31 of the calendar year following the year of death.
4. An ABLE account is another option some families use. Starting in 2026, a disability that began before age 46 qualifies, up from age 26 under SECURE 2.0. Annual contributions are tied to the gift tax exclusion, and the One Big Beautiful Bill changed how that cap is figured for tax years after December 31, 2025. For SSI, an ABLE balance counts as a resource only above $100,000.

Missed Deadline Means the 10-Year Clock

For employer plans, disability status depends on meeting the documentation rules in paragraph (e)(7). If the paperwork misses the deadline, he can be treated as an ordinary beneficiary under the 10-year rule. A trust beneficiary also has its own documentation requirements. The IRA beneficiary designation form sets who inherits the account.

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