One of the ways to make the most of an inherited IRA is to use what’s known as a stretch-out approach. Some people make a common error of naming their own estate as the beneficiary of their individual retirement account. 
This means that rather than going to a person who could benefit from accumulated wealth over time and reduce taxation, your estate puts this in the position of passing this on to your beneficiaries in as little as five years, which can become problematic for you as well as the beneficiaries if you are not careful about it.
A stretch-out approach is one thing to consider and contemplate as you go forward with your estate planning. This allows you to let your beneficiary stretch the length of time over which they will eligible to collect money from an IRA. This means that more growth can accrue overtime without income taxes chipping away at it.
When you use a retirement trust and other powerful estate planning tools, the result for your beneficiary can be a long term and big inheritance, even if you believe that your IRA only has a modest amount inside. Working with the right estate planning attorneys is critical for identifying an IRA approach that has your best interests and your loved ones’ best interests in mind.