| Mau Sanchez Capital™

Jun 8, 2026

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4. Falling into the "Tax Bracket Spike"

Even if you can wait until year 10 to take the money, should you?

Many heirs of large IRAs (think $500k or more) plan to let the money grow tax-deferred for a decade and then take a lump sum. This is a massive mistake. Taking a $500,000 distribution in a single year will almost certainly push you into the highest federal tax bracket (37%).

By working with a Fiduciary Financial Advisor, you can model a "stair-step" distribution strategy. By taking smaller amounts each year, you might stay in the 22% or 24% bracket, potentially saving yourself six figures in unnecessary taxes over the decade.

5. Using the "Big Bank" Automated Advice

If your inherited account is sitting at a massive Wall Street firm or a retail bank, you are likely just a number in a database. These institutions often have thousands of clients per advisor. They might send you a generic "reminder" email, but they aren't looking at your specific tax return or your other retirement goals.

At Portafolio Capital, we believe your investment strategy should be aligned with your personal risk modeling. We don't just manage the account; we manage the impact of that account on your entire financial life.

6. Mis-titling the Account

You cannot simply move your mom’s IRA into your own IRA. It must be titled correctly as an "Inherited IRA" (e.g., [Owner Name], deceased, FBO [Your Name], Beneficiary).

If you move the money into your own account by mistake, the IRS treats the entire transfer as a full distribution. That means you owe taxes on the entire balance immediately. This is a bell that cannot be un-rung, and it’s a mistake we see far too often when people try to DIY their inheritance.

7. Forgetting the Roth IRA "Full Empty" Rule

Roth IRAs are great because the distributions are tax-free. Because of this, many heirs think they can leave the money in the Inherited Roth IRA forever.

Unfortunately, the 10-Year Rule still applies to Roth IRAs. You don't have to take annual distributions (since they aren't taxed anyway), but the account must be at $0 by December 31st of the 10th year. If you leave even $1 in there on January 1st of year 11, you face that same 25% penalty on the remaining balance.

How to Protect Your Inheritance in 2026

The rules around inherited assets are no longer "set it and forget it." They require active, professional management to ensure you aren't losing 25% or more to avoidable penalties.

When you work with a Registered Investment Advisor like Mau Sanchez, you get more than just a portfolio manager. You get a partner who understands the nuance of the Texas Hill Country lifestyle and the complexities of modern tax law. We focus on:

Risk Modeling: Ensuring your inherited assets aren't exposed to more volatility than you can handle.
Tax Efficiency: Strategically timing distributions to keep you in the lowest possible tax bracket.
Fiduciary Duty: Putting your interests first, something the "big bank" brokers aren't always required to do.

Don't let a clerical error or a missed deadline erase the legacy your loved ones worked a lifetime to build.

Schedule a call with a fiduciary financial advisor today: https://calendly.com/portafoliocapital/15min

Portafolio Capital Management dba Mau Sanchez Capital is a Registered Investment Adviser. This content is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Advisory services are provided only pursuant to a written advisory agreement.

For more information on how we help retirees in the Hill Country take control of their financial future, visit us at https://portafoliocapital.com/ or give us a call at (512) 593-8380.

Frequently Asked Questions about Inherited IRAs in 2026

What is the 10-year rule?
Most non-spousal beneficiaries must empty an inherited IRA by the end of the 10th year following the owner's death.

Is there a penalty for missing an RMD in 2026?
Yes, the SECURE 2.0 Act sets the penalty at 25% of the amount not taken, though it can be reduced to 10% if corrected quickly.

Do I have to take money out every year?
If the original owner was already taking RMDs, you generally must take annual distributions in years 1-9, plus empty the account in year 10.