2020's Secure Act "10-year rule" on inherited IRAs may cause substantial tax liabilities for certain heirs.

Inherited pre-tax IRAs, post-2020, may incur significant tax liabilities due to the Secure Act's "10-year rule," requiring certain heirs, like adult children, to withdraw funds within ten years of the owner's death. Delaying withdrawals can lead to a "tax bomb," increasing overall income and tax rates. Experts recommend spreading withdrawals over the decade to minimize tax implications and consider future tax rate changes. Careful planning is essential to avoid unexpected tax burdens.