{"id":2985,"date":"2015-10-28T03:22:28","date_gmt":"2015-10-28T07:22:28","guid":{"rendered":"http:\/\/162.223.13.186\/~zacksim\/inheritance-coming-what-can-i-do-to-prepare\/"},"modified":"2022-02-26T13:23:03","modified_gmt":"2022-02-26T13:23:03","slug":"inheritance-coming-what-can-i-do-to-prepare","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/inheritance-coming-what-can-i-do-to-prepare\/","title":{"rendered":"Inheritance Coming – What Can I Do to Prepare?"},"content":{"rendered":"

New York, NY asks…<\/strong><\/em><\/p>\n

I Will Likely Gain an Inheritance Soon \u2013 What Can I Do to Prepare?<\/strong><\/p>\n

The very first thing to do is consult with a tax attorney and the estate\u2019s executor so you can talk-over the legal and tax issues associated with settling the estate. That could mean anything from paying taxes due on the estate, settling with creditors, and understanding the tax treatments of the assets once they are distributed to you.<\/p>\n

As a general rule, the federal and state estate taxes and the state inheritance taxes are typically due from the estate within nine months from the date of death. These taxes are typically based on the total value of the estate and are settled-up in probate court, before the assets are distributed to you and the other beneficiaries.<\/p>\n

Note: This can be a lengthy and somewhat complex process, so one tip for preparing is to be sure you don\u2019t get too ruffled if steps take longer than expected, or mini-issues arise.<\/em><\/p>\n

Re-Registering or Setting Up New Accounts<\/strong><\/p>\n

If you are receiving a cash settlement \u2013 from a life insurance or annuity death benefit for example \u2013 then I think it makes sense to open a brokerage account at a trusted custodian (like Schwab or Fidelity, for instance) and fund the account with your inherited proceeds. From there, you should discuss with your financial advisor what your goals for the assets are and how you can invest them accordingly.<\/p>\n

If you are inheriting a brokerage account that already has positions in it, like stocks and bonds, then I think it makes sense to open an account in your name and transfer the assets \u201cin-kind,\u201d meaning you do not sell any of the positions initially. As a general rule, those securities will receive a \u2018step-up\u2019 in cost basis, so the clock for gains and losses starts over.<\/p>\n

For IRAs or retirement plans, the process can be a bit trickier. There is an option to open an Inherited IRA in the name of the deceased account owner, \u201cfor your benefit.\u201d That usually means you will have to initiate and\/or continue the Required Minimum Distributions (RMDs) from the account based on the original account holders name. There is also the possibility that you can open an IRA in your name, and transfer the assets into it without having to initiate or resume the RMDs. At the end of the day, if you are the beneficiary of the IRA, you should speak to your tax advisor to determine the most advantageous approach to transferring the assets.<\/p>\n

Most if not all of these options will require you to fill out account transfer and opening paperwork, and will require copies of the death certificate.<\/p>\n

Bottom Line<\/strong><\/p>\n

Don\u2019t go it alone! There is too much of a risk that you miss something from a legal or tax standpoint, and that can create more problems down the road.<\/p>\n","protected":false},"excerpt":{"rendered":"

New York, NY asks… I Will Likely Gain an Inheritance Soon \u2013 What Can I Do to Prepare? The very […]<\/p>\n","protected":false},"author":1,"featured_media":4257,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-2985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/2985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=2985"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/2985\/revisions"}],"predecessor-version":[{"id":11505,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/2985\/revisions\/11505"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=2985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=2985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=2985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}