Investing Inheritance Money

inheritance money

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Tax Advice On Inheritance

When you receive inheritance money from a retirement plan do not spend it until you seek the advice of a tax professional. If the inheritance money is from an Individual Retirement Account it will be subject to annual minimum distribution requirements.

Fortunately you will not immediately feel the impact of taxation because distribution rules on inheritance money from Individual Retirement Accounts are based on the inheritors life expectancy. If the life expectancy remained that of the deceased persons you would pay taxes immediately.

Financial Advice On Inheritance

You may also need to seek the advice of a financial advisor. To preserve your options you need to make key financial decisions on the inheritance money within 9 months of receipt.

You will need to decide whether to take a cash distribution or to rollover the money into one of your own Individual Retirement Accounts. If you currently own a Roth IRA you may need to review your conversion options.

You have many decisions to make when you receive money from on inheritance. If you want that money to continue to grow in value until you personally retire discuss your game plan with your tax professional and financial advisor.