Heirs Confused Managing Sudden Inheritance
Individuals are experiencing frustration and confusion navigating the process of receiving inherited IRAs, particularly when dealing with estate splitting and multiple beneficiaries. The complexity of legal and financial procedures following a family member's passing creates significant stress and uncertainty.
SOURCES (60)
“My understanding is that laws around inheritance and estates etc vary from state to state. What I've seen in multiple banks in the same state is that if you're the sole owner of the account, then upon your death, the account will be closed and…”
“This might be a good question to ask a lawyer as well, as they might have some more in depth info when it comes to this. But I’m glad the other commenter answered your initial question!”
“Yes, the heir has to take the rest of the parent's RMD and that income will be reported on the heir's tax return. I believe it is supposed to be taken in the year of the parent's death, and the amount should be known because it's based on the year-end balance of the previous year, the parent's age and the amount already taken. However, if you can't get the information or can't get access to the account in a timely fashion, then the IRS is lenient about forgiving that”
“Anon account for reasons. I am POA for both Mom and Dad. Dad had a life insurance policy that I changed the beneficiary and ownership to a funeral home. I also setup a policy with the funeral home when we had to spend down assets for Medicaid. The insurance totally botched the change in beneficiary and it did not go through. They then tried to do a post mortem change after dad died and the funeral home wont sign it since they have the funds that they need. Mom is still the beneficiary. I am worr”
“He actually can spread it out over 11 tax years. Year of death, then each of the next ten tax years.”
“Assuming an inherited traditional IRA from a parent who was taking RMDs, does an RMD need to be taken in the year of death of the parent? What if the deceased parent had taken some portion of the RMD for the year of death? does the inheritor take the rest of the parent’s RMD? IRS rules mention that inheritor has until end of the following calendar year to take a distribution, but I don’t know which RMD calculation to use. I guess I can ask my Vanguard rep for help.”
“If you have descendants, and you yourself have plenty of money, you may consider disclaiming part of it and let your children inherit a portion.”
“My father passed away a little over a month ago. He didn’t have a will so we’ve been dealing with a lot of things we know nothing about. We have contacted his employer and they gave us life insurance information so we were able to get in contact with the company. They have an option to payout the policy into a secure account with their own partnered bank or something. It seems like it’s basically a savings account that has interest and we’d be given a checkbook where we could withdraw whenever.”
“Question regarding banking procedures upon the death of a depositor. Is this institution specific? For estate planning purposes if I die and have undeposited checks in my name can they be deposited into my account even though I am deceased? Examples would include tax refund checks as well as refunds in general. I have bank accounts in my name as well as a Revocable Living Trust account. Could the checks in my name be deposited into my trust account (converted from a Revocable Trust to an Irrevoc”
Does this include the lost compounding from letting it sit at 10% a year?
“I recently inherited an IRA worth approximately 500k. Beneficiary IRAs are required to be dispersed in 10 years. I’m 51 wife is 52 household income is $250k. I’m curious what my best option would be tax wise as far as lump sum vs spread out evenly over the 10 year period. Is there anything I can do to avoid or limit the tax burden? submitted by /u/Bedroom-eyes-69 [link] [comments]”
“my sibling would like to transfer an inherited IRA to me and take other assets instead. Can I take this inherited IRA and combine it with my other inherited IRA tax-free, or do we have to pay taxes because it’s sibling? It was distributed to us as beneficiaries already. submitted by /u/bobniborg1 [link] [comments]”
What’s the huge liability? The penalty for not filing it is 0.
“If they file a gift tax return, there isn’t. If they don’t file it, there is a potential for a huge liability.”
“Primero protege el dinero, no lo hagas crecer todavía: deposítalo en una cuenta de ahorros de alto rendimiento o en un money market del Tesoro a tu nombre solamente mientras armas un plan. Busca un CFP fiduciario que cobre solo por honorarios, no por venderte seguros o fondos, y también un CPA para revisar impuestos antes de mover grandes cantidades. Con un ex abusivo, cambiar contraseñas, activar 2FA, revisar beneficiarios y congelar tu crédito también sería parte del plan financiero, no parano”
“I struggle with this because I am the one that takes care of all of the finances, so if something happened to me it may be a little difficult for my husband to manage. He knows where the accounts and money are but not passwords. Our financial advisor is a friend (and coworker as we both with in finance) that lives two doors down, so at least he could help navigate those accounts. If something happened to my husband I would be fine”
“The problem with this is relatives may need to when it comes to dealing with wills and assets later. Naive legal statements like "I leave my car to Bob" become rather difficult when the car is tied into cloud accounts, locked EV chargers and weird subscription services. It becomes a whole digital forensics operation.I personally have no problem with them going through my stuff. Not the "I have nothing to hide" defence. I just don't give a crap.With respect to my personal situation, my father too”
“I’m curious what people actually have in place today: Does your spouse/family know about your bank accounts, investments, insurance, loans, etc.? Do they know where important documents are? Do you maintain a written record of this information? Or is most of it simply in your head? What have you done to make sure your family can manage financially if you are suddenly unavailable? submitted by /u/CallmeDeepak [link] [comments]”
“I am a HNW CPA. Depending on net worth, your CPA should be initiating or at least be a part of estate planning conversations with you. Depending on your current net worth, it may make sense to set up an irrevocable trust and gift some shares to it. As for current year/real time tax savings… you’re cooked. The difference between you and billionaire VC investors is that their earned income is minimal in comparison to their capital gain income. VC investing or selling a business can give you access”
“If you want to plan for inheritance, start now, you can start transferring wealth at $19,000 per person per year. Not limit and don’t even need to be included in that $15 cap you listed”
“If probate hasn’t closed, how are you closing the accounts and I assume want to withdrawal funds? Or have you gotten the ok to close it and all debts, etc are validated as closed and accounted for? Sounds like a quick visit with the appropriate paperwork would accomplish your goal.”
“I have been attempting to close a non-beneficiary checking account at a federal employee credit union for my deceased father’s estate. I am the appointed executor and we are going through probate. Per the credit union’s phone instructions, I mailed them a letter with the certified death certificate and executor letter attached. The branch manager signed for this on 07/02/26. I have received no response. I have called several times and was told the manager would return my call but she never does.”
“This makes sense to me now that some here have explained it. What still baffles me is that not one of the many many accountants I have inquired with seem to understand that enough to at least point me in the right direction! Why has no one said to me, Oh we don’t do that, what you’re looking for is a <whatever>. They’re all just like, “Huh?” I have gotten more information here than I have in probably over 30 minutes of phone calls to maybe a dozen different accountants.”
“Referrals aren’t allowed here. You’re welcome to ask for general guidance of how to find someone or things you should know, but asking for specific referrals is not allowed to prevent advertising.”
“I am inheriting an IRA from an elderly relative. Not huge, but large enough to possibly make an impact on taxes, so I need to put it into an IRA. I'm aware of having to take the money out within 10 years. I already have investments on Vanguard. I was trying to create the Inherited IRA account on Vanguard, but during the process I was asked what type of settlement fund to use: cash sweep or money market. This confused me, because it made me think the money would just dump into a settlement fu”
“OP said he inherited it in 2013, so safe would not be that old. Also, overstating appreciation.”
“My dad passed earlier this year and I’m dealing with his house from another state. It’s about 7 hours away and I seriously underestimated how annoying that distance would become. Nothing that comes up is ever a huge emergency. That’s almost what makes it worse. Something needs checking, someone needs access to the house or I need to be there for something that takes 20 minutes and suddenly I’ve lost an entire day. I’m not ready to sell until I get further along with the estate, so I need some ki”
“I’m in a similar situation, and hold all of my bond funds in an inherited traditional Ira. My thought is, I can hold my bonds funds here to minimize growth in this account and eliminate bonds in my Roth, and taxable brokerage. This minimizes increased tax burden when I take RMDs for the next 9 years during the highest earning years of my life. As far as how to channel the RMDs annually over the next 10 years… since you have Roth and 401k maxed, just push it over to your brokerage.”
“I just turnt 17 years old and since my brother discovered a bank account that our father left us(rip) we are looking to get 70-100k each and i know i have to make the most of it somehow,its not life changing money to where i can just buy houses and live off the rent but its a good headstart, I do not own a car and should probrably get one with that money House needs some work want to spend some on myself and going out,i dont find that hard bcus i dont really spend much,being broke teaches you a”
“You are not liable to pay his credit card bills and there is nothing they can do if he had no assets. If he did have a house or something like that there’s a chance they could put a lien against the home.”
“May your father Rest In Peace. You could let his banks know but your grief & recovery come first.”
“Hi - parents have $20 million and refuse to talk to an estate attorney. They say they know everything themselves. They just recently put me on a deed in an apartment in Miami so that I can write off the property taxes every year. Then they plan to have me give my half back when they get old and are about to die so I get a step up in basis (they said as soon as they get Alzheimer’s, cancer, or just hit 80, they’ll have me transfer the property back and when they die in over a year, I’ll get a ste”
“A family member of mine recently died and left me a fair amount of cash, among other things. I was paying back debt and was almost back to being debt free after around 5 years before this came upon me, so needless to say I am in no debt. I lived with my mom until she recently passed. She left me whay money she had saved, her car, and our house. I already had a car of my own which I nearly had paid off, so now I own two cars. I am also a single dad. I have full custody and receive no child suppor”
“due to obviously sad circumstances, i inherited a traditional IRA account worth ~110K. im curious about the following: is my taxable brokerage account the only thing i can move the money into? should i take the full ten years to deplete the ira or do it all at once now? it’s currently invested in some silly things (e.g., individual companies like google and coca cola)- should i put all in VT and BNDW? in a target date fund? That’s my usual MO. relevant details: non-spouse so i must deplete by 10”
“I’m about to purchase a house, and we have several options. We have a sizable sum being watched by financial advisors that is growing pretty strongly. It was an inheritance received earlier this year of $1M, and it is at 1.08. Would have been 1.15 if I hadn’t taken some out to handle personal debts and student loans. The house is about $450K and we’re talking about just paying about half as a down payment and also closing costs and a couple of renovations, and taking care of the rest as a monthl”
“My mother was legally married to a woman who passed away in 2018. Over time, it came to light that there's a stock certificate for shares of AMD purchased in the 80's... wife liked to squirrel things away and not everything was automatically transferred over to mom. Mom's done lots of digging for bank accounts, retirement accounts, etc. through whatever hoops a same-sex marriage may have brought up. The AMD stock has done pretty well since purchased, needless to say. Mom has gotten l”
“I am receiving around 200k from a civil settlement. What would be the best method to grow this, my initial reaction was to pay off all personal debts and use whatever is remaining to start saving and grow it from there but I'm questioning this. I would appreciate any perspectives on this. submitted by /u/Wrong-Aardvark259 [link] [comments]”
“Suppose I contribute to a 529 plan (in NY, and take the state deduction, in case it matters) with myself as owner and beneficiary. What happens if/when I die? (My plan, should I survive, is to convert it to a Roth IRA, but that's a long time from now.) Is it included in my taxable (federal and/or state) estate? If it passes on to my surviving spouse as owner, who names our child as beneficiary, is that a taxable gift? If so, from whom? (Assume we're past the annual and lifetime estate/gi”
“I think the best advice is to trust yourself! In contrast to what others are saying here, this is not advisor-level money. Everyone you tell is going to have an opinion, a "person" they suggest, and some are going to steer you toward products or investment types. Your uncle is already pointing you towards stocks and property - bad advice! Definitely find an online high yield savings account and park it there. Go for a good rate (3.4% or so is good now) with a well known bank, don't”
“Bro, when your father passes away, make sure the brokerage firm does a date of death step up. This steps up the cost basis on all of his securities to the date that he passes away. This essentially eliminates any unrealized tax gains. From there, you can sell off whatever amount you need to buy the condo. You will pay virtually zero taxes because the cost has been stepped up. Also, if you don’t sell it, there are strict rules on securities based lending. Specifically, you can’t use the money to”
“Have you talked to the attorney who prepared his Will? At our law firm, we had clients fill out questionnaires to identify their assets and liabilities. Reviewing a copy of even a dated one could be helpful for you.”
“Thank you. I did not know what the red flags would have been for a financial advisor, and I have seen it echoed that if they try to sell you a life insurance policy to run. I will take what you said into consideration though and check out those links on one of my days off.”
“Happens in every facet of inheritance. I get buy offers all over the place for my parents’ house and some random mineral rights. Bait and switch offers range from 90k to 350k all the time.”
“Thank you. My uncle was telling me to invest in stocks or property but that seems a little scary with the position I am in right now.”
“When this happened with my Father it took over a year to sort everything out. We did it through his Attorney and we hired an Estate Attorney”
“I executed my grandfather estate. He had hundreds of thousands saved up in CDs across several smaller banks in the few states he lived at over the years. Nothing with any of the big name investors.”
“If he had stocks that's a Big magilla and and could take monthsto sort out. I don't know if they still do this but we had to get a seal to of some kind for stocks. it's a lot to deal with.”
“Sorry for ur loss. Make an appt at his congressman's office. Ask if they can get records from state treasurer, social security and IRS for u. You'll need a death certificate of course . At the least they can call a liaison in those offices and you'll get a quicker response than on your own. A lot of older people will still go inside the banks . Check the ones near him and bring a death certificate and a photo. Have u found a book with passwords? most older people still write them dow”
“First, forward all his mail to your house. Second, grab the bank accounts statements and look for transfers. Third, look at last year’s taxes, you should be able to find interest and dividends and capital gains on Schedules B and D. But also look for 1099-INT, 1099-DIV, 1099-B and 1099-MISC forms and anything that’s a form K1”
“Hello! I recently inherited $100,000 from my grandparent's estate, and am at a bit of a loss as to what my next steps should be (I currently have the funds sitting in my bank account). I have not been good with financial planning. I've never had a proper savings account, 401k, etc. I have around $8,000 spread across some investments. I would typically just spend the funds I made at my previous job, since it wasn't paying a lot. I know, in hindsight, I could've done a better job a”
“Attorney, sure, but I would have pointed to a forensic accountant for this specific issue.”
“Being risk-averse, I’d guess he hid the information out of fear of receiving statements in the mail or the risk of a home robbery where the information could be compromised. Your best bet is to review the complete past tax filings, including state and local records. Depending on your experience with financial forensics, you might want to consult a CPA who specializes in estates and knows what to look for. This is why everyone should have a will and talk with the executor and contingent executor”