What’s the process of inheriting money?

[Anonymous]

Anonymous wrote:Actually a trust expedites thangs and makes it easier. You won’t need to go through probate and everything stays private.

There is usually some assets out of the trust or named beneficiaries people don’t think of that force probate. Have an attorneys office do it. A paralegal should be able to handle the whole thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Actually a trust expedites thangs and makes it easier. You won’t need to go through probate and everything stays private.

There is usually some assets out of the trust or named beneficiaries people don’t think of that force probate. Have an attorneys office do it. A paralegal should be able to handle the whole thing.

Will the attorney’s office call financial companies to make sure we are the beneficiaries? Or would they focus on getting other items into the trust?

OP

[Anonymous]

Anonymous wrote:Make sure to make a good list of personal property, the values of all the items, and how all the items are distributed or disposed of.

I have a neighbor who was executor for her parent’s estate. She got overwhelmed and apparently did not keep track of all the possessions from her parent’s house. She says she just gave everything away to various people and even just threw away many of the possessions, but her siblings are now asking questions about where is this and where is that and she can’t answer.

You don’t want to get in a situation where you can’t answer questions about the values and distribution of the possessions of your parents, so make sure to keep a good inventory that lists everything of value.

Thank you. We split a lot up when downsizing, thank goodness! The stuff left won’t be worth too much yet I will still make a list. I can see a sibling asking me about this or that and asking a million questions so it’ll be better to have this list.

[Anonymous]

Only read a few responses:

1. You can’t roll it over into your account if inherited by a non spouse. You need to open a new Ira just for the inherited roll over. That’s bc it will require RMDs, and the current retirement you have won’t.

2. Some institutions require a certified copy of the death certificate. Some don’t.

3. Make sure you name who will inherit your newly transferred inherited ira.

[Anonymous]

Be sure to get a lot of copies of the death certificate. Like twenty copies. You'll need them for all kinds of things.

[Anonymous]

Re inherited retirement accounts - are they still considered retirement accounts for the new recipient (ie - can’t be used until retirement age or incur penalties)? And how are they taxed?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Actually a trust expedites thangs and makes it easier. You won’t need to go through probate and everything stays private.

There is usually some assets out of the trust or named beneficiaries people don’t think of that force probate. Have an attorneys office do it. A paralegal should be able to handle the whole thing.

Will the attorney’s office call financial companies to make sure we are the beneficiaries? Or would they focus on getting other items into the trust?

OP

No, you call directly. The attorney or someone should have the will and basic paperwork.

[Anonymous]

Anonymous wrote:Re inherited retirement accounts - are they still considered retirement accounts for the new recipient (ie - can’t be used until retirement age or incur penalties)? And how are they taxed?

You transfer the money into an IRA in your own name. You have ten years to remove all the money so take it out when your income is the least or spread it out over the 10 years. You will have to take a portion the year they pass if they did not (going through this now).

[Anonymous]

Anonymous wrote:Re inherited retirement accounts - are they still considered retirement accounts for the new recipient (ie - can’t be used until retirement age or incur penalties)? And how are they taxed?

Non-spousal inherited IRAs are special. You will have to take an RMD each year. You cannot contribute into the account. Since 2019, the new rules mean that you have 10 years to take all the funds from the account, excluding a small handful of exceptions. Check out the information here -

https://www.investopedia.com/terms/i/inherited_ira.asp

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Actually a trust expedites thangs and makes it easier. You won’t need to go through probate and everything stays private.

There is usually some assets out of the trust or named beneficiaries people don’t think of that force probate. Have an attorneys office do it. A paralegal should be able to handle the whole thing.

Will the attorney’s office call financial companies to make sure we are the beneficiaries? Or would they focus on getting other items into the trust?

OP

They would do everything. They’ll obtain a list of all assets. If there is a car or a few savings accounts in the decedents name only that would require probate. Probably a small estate administrative probate depending on what state you live in. They know what forms need to be filed and who needs to get notice. Some probates need to have info published in local newspaper. All are time sensitive.

Maybe none of these will apply to you but it’s better to ensure everything is done correctly.
It also helps to have a professional disburse the funds to beneficiaries. You might have the best family relationships but money can change that. You don’t want anyone accusing you of cheating or self dealing. The estate pays the cost of the attorneys office.

[Anonymous]

I was the executor for my father’s estate. I have 2 siblings and everything was distributed equally between the 3 of us. Since your mother is still alive, you, along with her, can easily check the beneficiaries for IRA’s. As for distribution of assets, I handled each account individually. My attorney recommended I open an “estate checking account” for funds to be deposited. Your attorney can do this for you, but there will be costs.

My dad’s IRA listed 3 beneficiaries. This IRA became an Inherited IRA at his death. Basically, the amount was separated into thirds and we each handled our own for disbursements. You can spread it out in 10 annual payments or lump sum it. The bank that held the IRA asked me for a % to be held back for federal taxes. I receive a 1099-R each year for tax purposes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Actually a trust expedites thangs and makes it easier. You won’t need to go through probate and everything stays private.

There is usually some assets out of the trust or named beneficiaries people don’t think of that force probate. Have an attorneys office do it. A paralegal should be able to handle the whole thing.

Will the attorney’s office call financial companies to make sure we are the beneficiaries? Or would they focus on getting other items into the trust?

OP

They would do everything. They’ll obtain a list of all assets. If there is a car or a few savings accounts in the decedents name only that would require probate. Probably a small estate administrative probate depending on what state you live in. They know what forms need to be filed and who needs to get notice. Some probates need to have info published in local newspaper. All are time sensitive.

Maybe none of these will apply to you but it’s better to ensure everything is done correctly.
It also helps to have a professional disburse the funds to beneficiaries. You might have the best family relationships but money can change that. You don’t want anyone accusing you of cheating or self dealing. The estate pays the cost of the attorneys office.

The estate will pay a lot more if you have the attorneys/paralegals do everything including the admin work. It is far more effective for you to call Fidelity and arrange for sending in the death certificate than to have the attorneys office do that. Obv the attorneys should handle the legal paperwork.

[Anonymous]

I moved my moms car into my name when she stopped driving. We needed to keep it because she can’t get in and out of my car, and we needed to get it registered in VA so it made sense to put it in my name. It’s a tax free transfer if it’s from a parent to a child. This will make things easier once my mom is gone. I’ll either “buy” my brother out of it or sell it and split the proceeds.

I already have a spreadsheet started with assets. My brother and I are going to split the values but one may want a more valuable asset and less money- everything is in a trust so it’ll be easier to distribute that way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Actually a trust expedites thangs and makes it easier. You won’t need to go through probate and everything stays private.

There is usually some assets out of the trust or named beneficiaries people don’t think of that force probate. Have an attorneys office do it. A paralegal should be able to handle the whole thing.

Will the attorney’s office call financial companies to make sure we are the beneficiaries? Or would they focus on getting other items into the trust?

OP

They would do everything. They’ll obtain a list of all assets. If there is a car or a few savings accounts in the decedents name only that would require probate. Probably a small estate administrative probate depending on what state you live in. They know what forms need to be filed and who needs to get notice. Some probates need to have info published in local newspaper. All are time sensitive.

Maybe none of these will apply to you but it’s better to ensure everything is done correctly.
It also helps to have a professional disburse the funds to beneficiaries. You might have the best family relationships but money can change that. You don’t want anyone accusing you of cheating or self dealing. The estate pays the cost of the attorneys office.

The estate will pay a lot more if you have the attorneys/paralegals do everything including the admin work. It is far more effective for you to call Fidelity and arrange for sending in the death certificate than to have the attorneys office do that. Obv the attorneys should handle the legal paperwork.

He should contact an attorney specializing in probate. They might just send him a letter of instruction on what he needs to do with regard to the non probate accounts. What’s that expression “penny wise pound foolish”? Don’t try to skimp, get it done correctly and efficiency. Less stress on you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Actually a trust expedites thangs and makes it easier. You won’t need to go through probate and everything stays private.

It depends. I had a nightmare of a time when my mother passed away; lots of problems and stress thanks to a very poorly drafted trust.

A trust is not automatically easier. It can also be more difficult to deal with if you have a problematic trustee and/or family disputes.