What You Should Know About Leaving an Inheritance

Today’s Prep:

Estate planning is just one piece of a comprehensive retirement plan but it’s an important one because you only get one opportunity to get it right. The problem is many individuals have very little experience with inheritances and often make mistakes when handing them down or receiving them. Let’s try to change that today by informing you about inheritances and the steps you need to take.

 

Equipping Points:

There are two sides to every inheritance and mistakes can be made on either if people aren’t prepared adequately to handle the wealth.

We’ve seen a number of common missteps people make that end up costing them and their loved ones. No one wants to see the IRS benefit the most from an inheritance so you need to make sure your finances are in order.

On this episode of the Retirement Ready podcast, we’re going to talk all about inheritances and help you understand where mistakes are often made and how tax implications can play a big part in your planning strategy, especially now that the SECURE Act is in place. Now, more than ever, you should be paying attention to your estate and how you want to maximize your legacy.

Then there’s the other side of the inheritance. If you’re fortunate enough to receive this gift, how prepared are you to put it to work for your retirement? Many people don’t know the first step to take when they receive money and it ends up turning into frivolous spending. Don’t let that happen to you or your loved ones.

If you think you might receive an inheritance or you have plans to pass down your wealth, this episode should valuable to you. We want to help you protect your legacy and set your family up for a secure future.

Listen to the full episode or click on the timestamps to skip around to different topics.

0:49 – Let’s tackle the biggest questions around an inheritance.

1:09 – First, what about taxes. What implications are there with an inheritance?

1:35 – Iowa does have inheritance tax if it comes from outside of a ‘straight line.’

2:21 – Here’s what happens if someone leaves you an IRA or 401k.  

3:55 – What are some of the changes coming from the SECURE Act relating to inheritances?

5:34 – These are the common mistakes people make with inheritances.

7:33 – Some companies allow a per Stirpes designation. Here’s how that works.

8:46 – Are there some common mistakes on the receiving end of an inheritance

 

 

Related Resources:

Retirement Savings Options: IRA Contributions & Roth Conversions

Understanding The SECURE Act, Part 1

Understanding The SECURE Act, Part 2: Stretch IRAs

 

Today’s Takeaway:

[spp-tweet tweet= “Understanding the tax consequences of these things is critical because you want to maximize the amount you’re going to get. You don’t want to leave money to your family and have Uncle Sam or the IRS be the largest beneficiary.  –Eric Peterson“]

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