Americans hold a lot of wealth in IRAs. However, do you know the tax consequences?
Forbes recently discussed some possibilities for beneficiaries of IRAs, including the good deals and the bad deals in "What To Do If You Inherit an IRA."
While inheriting an IRA account can be great news for some, it can also turn to bad news, if the beneficiaries make the wrong decisions about what to do with those accounts.
The single most important thing to keep in mind is that an inherited IRA can be the source of lifetime payments or it can be a source of a very large and immediate tax bill.
If you are smart, then you will want it to be the former, unless you absolutely need a large sum of money right away.
The general rule of thumb is that you should never take more out of an inherited IRA than you are absolutely required to take by law. It is recommended that you take no more than the required minimum distribution.
Exactly how much that is, will depend on several factors.
Before you make a decision on an inherited IRA, it would most likely be beneficial to consult an attorney.
Reference: Forbes (July 10, 2017) "What To Do If You Inherit an IRA."
If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit www.simmonsandschiavo.com