Schmidt Financial Group Releases Estate Planning Brief on Tax Treatment of Large Retirement Accounts

New advisory outlines considerations for inherited traditional IRAs and 401(k)s under current distribution rules

DEERFIELD, IL, UNITED STATES, February 12, 2026 /EINPresswire.com/ -- Schmidt Financial Group announced today the release of a new educational briefing addressing the estate planning implications of large qualified retirement accounts, including traditional IRAs and 401(k)s.

The briefing examines how these accounts are treated for tax purposes at death and outlines considerations for families navigating current distribution regulations.

According to Sanford Schmidt, CHFC, CLU, the firm developed the briefing in response to increasing client inquiries regarding inherited retirement accounts and accelerated distribution timelines under current law.

“Over the past several years, we’ve seen retirement accounts become one of the largest assets in many estates,” Schmidt said. “At the same time, regulatory changes have altered how beneficiaries must withdraw inherited accounts. This combination has raised important planning questions.”

Unlike many taxable assets, traditional qualified retirement accounts generally do not receive a step-up in cost basis at death. Distributions from inherited IRAs and 401(k)s are typically subject to ordinary income tax when withdrawn. In addition, for estates that exceed federal exemption thresholds, retirement accounts may be included in the taxable estate.

The firm’s briefing also addresses current rules requiring many non-spouse beneficiaries to fully distribute inherited retirement accounts within ten years, which may affect income recognition timing.

Schmidt stated that the purpose of the release is to provide clarity regarding how retirement assets differ from other estate components.

“There can be confusion around how various asset classes are taxed,” Schmidt said. “Our goal was to present the information in a structured way so individuals can better understand the distinctions and discuss them with their tax and legal advisors.”

The educational document reviews:

• Tax treatment differences between qualified and taxable assets
• Distribution timelines for inherited retirement accounts
• Potential coordination considerations within broader estate plans
• The role of liquidity planning in estate settlement

Schmidt Financial Group indicated that the briefing will be made available to clients and professional partners as part of the firm’s ongoing educational outreach initiatives in 2026.

About Schmidt Financial Group

Schmidt Financial Group is a Deerfield, Illinois-based financial services firm specializing in retirement planning, estate planning coordination, and tax-aware wealth strategies. The firm works with individuals and families to evaluate long-term financial structures in alignment with current regulatory frameworks.

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