Questions to Ask a CPA, Attorney, or Financial Advisor About an Inherited Retirement Account

Hiring a CPA, estate attorney, or financial advisor after inheriting a retirement account is the easy part. Getting useful answers out of them is harder — especially when you are grieving and unsure which questions matter. Generic professionals give generic advice. The questions below force specific, actionable answers that protect the estate from costly mistakes.

Questions for a CPA

"Was the deceased past their required beginning date, and do we owe a year-of-death RMD?" This is the first thing to settle. If the account owner died after reaching their RBD (age 73 for those born 1951–1959, age 75 for those born after 1959), someone must take the final RMD by December 31 of the death year. Missing it triggers a 25% excise tax on the shortfall — reduced to 10% if corrected within two years, but only if your CPA catches it in time.

"I'm subject to the 10-year depletion rule. Can you model my total tax liability under different annual withdrawal schedules?" Non-spouse beneficiaries must empty an inherited IRA or 401k by the end of the tenth year after death. But the IRS does not care how you distribute the withdrawals across those ten years. A CPA should run projections showing your marginal tax rate in each scenario — front-loading withdrawals in low-income years, spreading them evenly, or deferring to year 10. The difference between a bad schedule and a good one can be tens of thousands of dollars on a large account.

"Are there any state-level inheritance taxes on this account, and can we capture an early-payment discount?" Pennsylvania offers a 5% discount if inheritance tax is paid within three months of the death. New Jersey freezes 50% of account assets until a tax waiver is issued. Your CPA should know your state's rules and deadlines without having to look them up.

"Does the estate need a separate EIN, and which IRS forms do we file?" If the account passes through the estate (no named beneficiary, or the estate is the named beneficiary), you need an Employer Identification Number and will file Form 1041 (estate income tax return) in addition to the deceased's final Form 1040. The CPA should handle both and coordinate the 1099-R reporting.

"Is there a cross-border tax issue?" If the deceased held a Canadian RRSP, a UK pension (SIPP or defined contribution), or Australian superannuation, the tax treatment is completely different from a US IRA. Canada's deemed disposition rule generally taxes the full account value on the deceased's terminal tax return. A US beneficiary generally receives the date-of-death value as capital (with potential Form 3520 reporting if it exceeds the reporting threshold); post-death growth is taxable in both countries and subject to 25% Canadian non-resident withholding that may be reduced to 15% under the treaty, with a possible foreign tax credit on Form 1116. If your CPA hesitates on cross-border questions, you need a different CPA.

Questions for an Estate Attorney

"Does this account actually go through probate, or does the beneficiary designation control?" Retirement accounts with a valid beneficiary designation bypass the probate estate entirely. The attorney should confirm whether a current designation is on file and whether it was properly executed. If no designation exists — or if the named beneficiary predeceased the owner — the account may default to the estate, and probate is unavoidable.

"Is there any basis for a third party to challenge the beneficiary designation?" Community-property law can give a spouse an interest in retirement savings acquired during the marriage, while a qualified domestic relations order (QDRO) can award a former spouse part of an employer-plan benefit. The attorney should review the designation alongside the plan documents, state property laws, and any divorce order.

"What is the FINRA arbitration timeline if the custodian mishandled the account?" Under FINRA Rule 12206, a customer claim becomes ineligible for arbitration after six years have elapsed from the event that gave rise to it; this is separate from any court filing deadline. If you suspect the custodian made unauthorized trades, failed to process a beneficiary change, or mismanaged the account before the owner's death, the attorney should evaluate whether an arbitration claim is viable — and whether the accelerated-processing procedure under Rule 12808 is available to a party age 70 or older or with a terminal illness that could affect their ability to participate if delayed.

Questions for a Financial Advisor

"What is the most tax-efficient way to title this inherited account?" A surviving spouse can roll the account into their own IRA, keep it as an inherited IRA, or (for employer plans) elect the SECURE 2.0 spousal treatment. Each option produces different RMD schedules and tax consequences depending on the spouse's age and income. The advisor should walk through all three options with numbers, not generalities.

"Should I take distributions now or defer?" For a Roth IRA, there are no taxes on qualified distributions, so deferring until year 10 maximizes tax-free growth. For a traditional IRA, the answer depends on your current and projected income. An advisor who says "it depends" without modeling the numbers is not worth the fee.

"How does this inherited account fit into my overall financial plan?" A large inherited 401k can push you into a higher tax bracket, affect your Medicare premiums (IRMAA surcharges), or change your retirement timeline. The advisor should integrate the inherited account into your existing plan rather than treating it as an isolated question.

How to Screen Before You Hire

Ask one test question before committing: "Under the SECURE Act 2.0 final regulations, when are annual RMDs required during the 10-year window?" The correct answer: only when the original owner died on or after their required beginning date. Any advisor who cannot answer this precisely does not handle enough inherited retirement accounts to help you.

The Retirement Account Claims toolkit includes a professional vetting checklist and a complete list of questions organized by account type and jurisdiction — so you walk into every meeting prepared and leave with answers you can act on.