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If you have a Traditional IRA and pass away before the age of 59 1/2 years old, your designated IRA beneficiaries will receive payments and they won't be subjected to penalty fees.
As the beneficiary of an IRA, you can transfer the inherited IRA to an Inherited IRA Beneficiary Distribution Account, which can be set up by your financial planner or estate planner. Or, you can disclaim all or part of your portion of the inherited money.