Let’s face it, this is not likely your most favorite time of year for one very important reason; taxes.
Fortunately for you though, there is help out there. I love helping my clients to keep more of what they earn by helping them find ways they may have overlooked to reduce the amount that they ‘give’ to Washington each year.
In my article about Stretch IRA's, I wrote about two key provisions that can allow your beneficiaries to 'stretch' out your IRA, giving your assets the opportunity to last for many years to the benefit of those you care about by allowing the IRA to continue to accumulate on a tax-deferred basis (or with Roth IRA’s, potentially tax-free) for as long as possible.
This is the third and concluding post about some options you might have if you inherit an IRA or benefit from an employee sponsored benefit plan.
If you're a non-spouse beneficiary of an IRA or benefit from an employee sponsored benefit plan, you unfortunately generally have far fewer options.
Recently I posted about some options you might have if you inherit an IRA or benefit from an employee sponsored benefit plan. As promised, here are a few additional options for you to consider.
If the IRA owner or plan participant died before he or she began taking required minimum distributions, you can generally elect to distribute the entire interest in the IRA or plan within five years of the owner's or participant's death. (In this case, you don't have to begin taking distributions the year after death.)
What are my options if I inherit an IRA or benefit from an employer-sponsored plan?
If you don't want the money, you can always disclaim (refuse to accept) inherited IRA or funds from an employer-sponsored plan. But if you're like most people, you’ll want the money.
Your first thought may be to take a lump-sum distribution, but that's usually not the best idea.