If you inherited an individual retirement account , there is a key change for 2025 that — without action on your part before year-end — could trigger an IRS penalty of up to 25%.

Starting in 2025, certain non-spouse heirs, including adult children, must start taking required minimum distributions , or RMDs, while emptying their inherited IRA over 10 years, according to IRS regulations released in 2024.

The change comes as investors prepare for the " great wealth transfer ," with more than $100 trillion expected to flow to heirs through 2048, according to a December report from Cerulli Associates. Much of that wealth will eventually move from parents to adult children, and tax planning for that windfall will be important, experts say.

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