Inherited IRA Rules: Avoid These Costly Mistakes!
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- Опубліковано 15 лип 2024
- Explore the complexities of inheriting IRAs in our latest video. Attorney Andrew Bethel of Bethel Law breaks down the intricacies of IRA inheritance, including the implications of the SECURE Act, differences between Traditional and Roth IRAs, and the specifics of conduit and accumulation trusts. Understand the tax implications, exceptions to the 10-year withdrawal rule, and the nuances of inherited 401(k)s. This comprehensive guide is essential for anyone dealing with estate planning, retirement accounts, or tax planning. Dive into the details of how state laws like California's affect IRA distributions and stay informed about the potential penalties for non-compliance with the SECURE Act. Perfect for financial advisors, estate planners, and individuals navigating the realm of retirement and estate planning.
0:00 - Intro
0:36 - What is an IRA?
1:27 - Inheriting an IRA
1:55 - The SECURE Act & The 10 Year Rule
3:13 - Trusts & Inherited IRAs
5:26 - Death and Taxes
6:35 - 401(K)s Included
6:59 - Penalties & Taxes
7:55 - State Law
8:22 - Outro
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Disclaimer
Viewing this video does not create the expectation of an Attorney-client relationship. The information from this video is for general information purposes only. Nothing should be taken as legal advice for any individual case or situation.
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Thanks for the well-explained information. I have a timely question re: my 2023 income taxes. I'm a 58-year-old NEDB who inherited a traditional (pre-tax) IRA in the form of an annuity from my mother who passed away in 2022 at age 83 (after her RMD for this particular account). I was unaware of the 10 year rule at the time and (foolishly) elected to withdraw the lump sum-let's call it $100k-in 2023 so I received a Form 1099-R. I'm just trying to make sure that I'm responsible for paying tax on the full amount. Base on my research, I believe this is the case. I did note that you mentioned "non-deductible money inside the IRA" in the video. My question is: How do I go about finding out if this inherited IRA has any non-deductible funds in it? If it helps, in the IRS Form 1099-R the box 2b has "Taxable amount not determined" checked off and the "Total distribution" box is also checked off. Thank you!
Ca. Resident, My mother in law is a designated bene being less then 10 yrs younger then her brother who passed, you noted she is exempt from 10 yr rule but is she required to follow the IRS life expectancy table or ?
Thanks in advance
can you open a non-grantor irrevocable trust and transfer a roth account to the trust. Does the trust subject any RMD? Thanks
Will I be taxed on earnings from my inherited Roth IRA as a non-spouse beneficiary if my beneficiary Roth account holding the funds was opened only 2 years ago but my mother's original Roth was over 5 years old? The 1099R gave a T code.
If death came prior to 2020, how long do you have to withdraw the inherited IRA if you're a non spouse (son)? My financial advisor keeps telling me 5 years but I don't see material on this.
You said, "it would be easier to speak with your attorney". I may have a problem. My attorney has totally abdicated responsibility for advising or educating my on ways to handle my IRA. Should I fire them? Should I to get a refund on the payments I've already made?
What if named beneficiary is a sibling, and is 5 years older than decedent - exception to 10 year empty requirement? If decedent had not started RMDs, does beneficiary have an annual RMD requirement?
It is my understanding that the beneficiary in this instance can withdraw the funds based on their life expectancy table. BUT RMD still have to be taken every year.
I am still confused. My mom past last year. So I should withdraw monies out each year?
That's entierly up to you. Do you want to take money out over the 10 years (paying taxes on the distributed amount each year), or do you want to keep the money in the IRA for as long as possible to maximize your potential gains (keeping in mind that when you take it all out at the end, you'll have to pay taxes on the full amount)? Alternatively, do you take it all out now, emptying the account, and pay the taxes now?
The rules only specify that you have to withdraw all the money within 10 years but leave it up to you on how you do that.
My $0.02 would be to leave as much in as long as possible to maximize my potential gains. However, if you need the money, then it's there to access.
I’m confused, I just watched another video and they said on a non-spouse IRA if they were taking RMD’s you would have to continue taking those RMD’s, they said the IRS has not made a final ruling and for 2022 and 2023, they said the IRS have waived any penalties for not taking RMD’s for those years. Can you clarify this??? Can I just take it out on the 10th year?
You are correct that the rule is you need to withdraw each year if the original owner was taking RMDs and also correct that penalties were forgiven for 2021,2022, and 2023. There has not been a ruling yet for 2024, so you may want to wait and see what happens.
I have a Roth IRA , does the 10 year rule apply to my spouse if my Roth is in a living trust and I die .
This newer 10 year rule doesn't apply to spouses. The rule generally applies to “non-spouse beneficiaries,” often kids and grandkids,..But a surviving spouse isn’t beholden to the rule. They can roll their inheritance into their own Roth IRA and not have any mandatory withdrawals during their lifetime.
@@1Mannco Thank you !
Couldn't have said it better myself!
Hi I didn’t take any money from an inherited Ira what should I do now?
And it’s more than 10 years
Please pronounce IRA the correct way!