Worcester elder law attorneys can provide assistance in planning for a secure retirement and in making certain that you have the right type of retirement accounts to provide income to seniors. One consideration with retirement accounts is what happens to those accounts when the original accountholder passes away. Those who inherit an IRA need to know what the rules are when the retirement account is left to them, and those who are investing in an IRA may also wish to understand exactly what will happen to their account after they pass away.
The Law Offices of James A. Miller, P.C. can provide assistance with inherited IRAs and with all other issues related to IRAs and inherited assets of all types. When you need advice from Worcester elder law attorneys on the financial issues that matter to you, our firm is here to provide the guidance you need. Give us a call today to find out more about the ways in which our legal team can help you.
What Happens to an Inherited IRA?
When you inherit an IRA, you’ll have to decide if you want to try to roll the money into your own IRA, if that is an allowable option under the circumstances. You will also need to decide how to structure withdrawals from the IRA, as you may be required to take money out of the account at designated intervals so you can avoid being hit with taxes.
If you are the sole beneficiary of an IRA inherited from a spouse, you can transfer the assets into your own IRA, you can transfer the assets into an inherited IRA, or you can take all of the assets out of the IRA. If you transfer the assets into your own account, you’ll have to follow the same rules for taking required minimum distributions and for waiting until you reach retirement age for withdrawals as you would have had to follow if the account was always yours.
If you transfer assets into an inherited IRA, you could start taking money out right away without a tax penalty and would have to take all withdrawals within five years or you could take out money as required based on a life-expectancy option that allows you to withdraw funds based on a set schedule created by the IRS. The schedule is based on the life expectancy for a person of your age. Although you won’t have to pay a penalty for either of these options, you do have to pay taxes on money withdrawn from a traditional IRA. You could also take all of the assets out of the IRA when you inherit it, but this could mean a big tax bill all at once.
If your spouse was over 70 ½ when he or she passed away and the IRA was inherited, rules differ slightly for required minimum distributions. Those who inherit from a non-spouse are also subject to different rules, as are individuals who inherit a Roth IRA.
How Worcester Elder Law Attorneys Can Help You
Worcester elder law attorneys can explain all of your options when you inherit an IRA so you can decide which is your best option for dealing with the account that you inherited. We can explain to you what your choices are for the money in the account, depending upon the type of IRA that you inherit and your relationship with the deceased person who left the funds to you. We can also offer you advice on what your best course of action is to minimize taxes and help the money to grow tax free.
Since you have only a limited period of time to make a decision after you inherit an IRA, you shouldn’t hesitate to reach out to a experienced attorney as soon as possible.
Getting Help from Worcester Elder Law Attorneys
Worcester elder law attorneys at Miller can provide you with invaluable guidance on deciding what type of IRA you should invest in to provide for yourself during retirement and to make plans for what will happen to IRA assets after you pass away. Our legal team can also provide financial advice to anyone who inherits an IRA so you can make informed choices about how to minimize your tax liability from this type of inheritance.
To learn more about the tax rules for IRAs and about other financial issues that can affect your retirement or an inheritance you receive, join us for a free seminar. You can also give us a call at 866-370-3888 or contact us online to talk with an experienced attorney and get personalized advice about your retirement plan. Give us a call as soon as possible because a lot of money could be at stake and we can provide the advice you need to protect your assets and achieve financial security.
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