Anonymous wrote:I have no idea. I did read some but was hoping someone could help me with info or a couple of links to figure out how to deal with these. Also I haven't slept much so maybe need a little hand-holding.

There is a 401k, IRA and Roth accounts.

Thank you.

Sorry for your loss OP!

As another PP pointed out, everything starts with a death certificate. In the meantime, please answer the following questions..

Need some more details. When you say family member, who is it? Husband, brother, sister?
If not your spouse, then does this person have a spouse?
How old is the deceased, their spouse and kids (if any)?
Has the deceased been married previously?
Does an account exist for the deceased on the social security website?
Is there a will?
Do they have a list of all the accounts?
Does each account have a named beneficiary?
Is there a house involved?
Is there any other property in the deceased's name (e.g. car, boat)?
Is there a life insurance policy? Does it have a named beneficiary?

In simple terms:
If the deceased person has minor kids, the survivging spouse may be entitled to survivor social security benefits.
Depending on their age and the surviving spouse's age, the surviving spouse may be entitled to spousal benefits.
As long as financial accounts (Roth, Brokerage, etc.) have a named beneficiary, the money goes directly to the named beneficiary and avoids probate.
Their employer will need a death certificate (a photocopy or a notarized copy) before they are willing to retitle the 401K to the survivor. It is possible to just leave the money where it is or move it to an inherited IRA or to their own 401K (if a spouse).

Everything starts with getting the death certificates. You might need additional copies.

For insurance policies, 401K’s, Roth IRA’s that you are the named beneficiary, you need to reach out to those companies and they will move the $ to you. Each will have a different requirement as to what documentation they require. Those assets can be transferred to you but with the 401K’s etc will have to go into a new account. Be aware of RMD’s etc, rules changed in 2020…

In VA, you will need to file for probate for the county/city that your family member lived. Probate in VA is via state law but each jurisdiction handles intake differently. It takes a a couple of weeks to be sworn in as an executor. You will file an intake form and then have to notify heirs within 30 days. Within 4 months you will have to certify you notified heirs and submit an inventory of assets. You will file taxes and estate taxes. Assets that moved to you via POD/TOD and insurance are not declared but any $ in checking and savings that moved to you have to be reported. Furniture, clothing, etc have to be reported.

Initially, you need to get you arms around the assets. Any property, bank accounts, retirement accounts, cars etc

Then you are going to need to create an EID for the estate and open an estate account for the deceased. This is what you will file taxes on and pay bills. Initially you may be paying some bills out of pocket as an executor since it takes time to get sworn in as executor and create an estate account. Keep records of everything. Do not co mingle $.

Good luck, there is a lot of paperwork. It sounds like the estate you are handling is pretty simple which is good.

Another thing to consider - Required Minimum Distributions on the retirement accounts

Was the person of retirement age and did they take their RMD for the year? If so, you will need to make sure that you take that.

Anonymous wrote:Did your relative die this year (2023)? If so, I don't think you have to worry about tax returns until next year. I agree with calling the holder of the brokerage accounts, but don't expect it to be just one phone call. Expect for it to take several months. Good luck, and sorry for your loss.

You have to file his 2022 1040 and then a final 2023 1040.

Anonymous wrote:OP, what state? I am going thru this now in Virginia.

They are in VA.

I’m PP, here are some links that might help…

https://www.usaa.com/inet/wc/advice-family-lossofalovedone?akredirect=true

https://www.elderlawanswers.com/probate-v-non-probate-what-is-the-difference-14411

https://www.nolo.com/legal-encyclopedia/virginia-probate-an-overview.html#:~:text=Probate%20assets%20can%20include%20vehicles,beneficiary)%20are%20also%20probate%20assets.

OP, what state? I am going thru this now in Virginia.

Do NOT blend your inherited IRAs into your existing IRAs. The inherited IRAs will have to be liquidated within 10 years. Depending on your age, you may not need to withdraw from your IRAs for many years. You don't want to mingle the funds you HAVE to liquidate within 10 years with funds that don't have to be distributed for quite some time. The same goes for any Roth IRAs.

You will have to file a final 1040 for the year in which your relative passed. If they passed in 2023 and had not yet filed their 2022 tax return, you will also have to file it (meaning you'll be responsible for a 2022 and 2023 Form 1040 tax return). With any luck, there will be a small tax liability because getting a refund in respect of a decedent from the IRS takes a long time, and if you don't have Letter Testamentary issued by a Court (which happens in probate) then it could take even longer.

You may not have to file a Form 1041 estate tax return (not the death tax return, Form 706) *if* the decedent's estate earns any income between date of death and the date the assets are distributed to you. From what you've indicated, there may be some minor interest income during that period. It's quite possible you can get away with not having to file Form 1041.

You need to ascertain the beneficiaries for all assets. For IRAs and 401(k)s, you can basically transfer the balance to what is called an "Inherited IRA" or 401(k). Again, don't mingle inherited IRA funds with your own IRA funds because they will often have different distribution rules associated with them.

If the decedent was older than 72, he/she was taking Required Minimum Distributions from their (non-Roth) retirement accounts. If they passed in 2023, you should transfer the IRAs to yourself and then resume taking required distributions based on the decedent's birth date and age (as opposed to your age if you're not yet 72). If you are a sibling and less than 10 years younger then the decedent, you can elect to spread out the IRA distributions over your lifetime, rather than according to the decedent's age.

Frankly, I think you need to buy an hour or two of someone's time. While you may be able to do all of this work yourself, you do need someone with knowledge to help you formulate your game plan. If it weren't tax season I'd offer to help.

Good luck!

Did your relative die this year (2023)? If so, I don't think you have to worry about tax returns until next year. I agree with calling the holder of the brokerage accounts, but don't expect it to be just one phone call. Expect for it to take several months. Good luck, and sorry for your loss.

Call each bank. Say you are the executor. You will have to give them a death certificate. If you can visit an actual branch, that might be easier. Then, you open a new account in your name with your social security number and have the assets transferred.

Anonymous wrote:OP. I am supposed to be the executor and beneficiary apparently. There is just a bank account and 4 retirement accounts. With info on each.

Are you the beneficiary of each account? If so, they they are yours.

Anonymous wrote:Unfortunately I am also going thru this now. It is completely overwhelming. I’m still gathering information but was told if the estate is less than 50,000 you can avoid probate in Virginia. I figured I wait until after the busyness of tax season to find an accountant to help with the returns. The investment company said they needed the probate paperwork & death certificate in order to deal with the IRA, etc. Get more copies of the death certificate than you think you need because everyone needs one in order to help you. I’m sorry for your loss.

This is good advice. I would focus on calling the accounts your family member held and the account you want the money transferred into because it depends on account type. Many accounts have a payable on death policy or in the case of retirement accounts go straight to the beneficiary and can be handled quite simply with the death certificate. When we handled this, it was two phone calls, a scanned copy of the death certificate and all was done.

Anonymous wrote:Unfortunately I am also going thru this now. It is completely overwhelming. I’m still gathering information but was told if the estate is less than 50,000 you can avoid probate in Virginia. I figured I wait until after the busyness of tax season to find an accountant to help with the returns. The investment company said they needed the probate paperwork & death certificate in order to deal with the IRA, etc. Get more copies of the death certificate than you think you need because everyone needs one in order to help you. I’m sorry for your loss.

OP. Thank you and so sorry for your loss as well. Going through this has been really really hard.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have no idea. I did read some but was hoping someone could help me with info or a couple of links to figure out how to deal with these. Also I haven't slept much so maybe need a little hand-holding.

There is a 401k, IRA and Roth accounts.

Thank you.

These accounts will have beneficiaries and won't be distributed through probate or via a will. You usually just need to show the bank the death certificate and it will distribute to the listed beneficiaries.
Sorry for your loss, OP.

Thank you. Yes I am the beneficiary on all of these. So a 401k and an IRA can be transferred to an IRA in my name? And a Roth IRA can be transferred to my Roth IRA? And so they are pooled with my money and same withdrawal rules apply?

The IRAs roll over to a special account and I believe you have to do the distributions in 10 years. There are some exceptions for spouses and based on age, but those likely won’t apply to you. They won’t be mingled.

Unfortunately I am also going thru this now. It is completely overwhelming. I’m still gathering information but was told if the estate is less than 50,000 you can avoid probate in Virginia. I figured I wait until after the busyness of tax season to find an accountant to help with the returns. The investment company said they needed the probate paperwork & death certificate in order to deal with the IRA, etc. Get more copies of the death certificate than you think you need because everyone needs one in order to help you. I’m sorry for your loss.