Inheriting and anticipating taxes help


#1

I am suddenly an orphan at 40 with no siblings :slightly_frowning_face: and I’m feeling pretty rotten about it. I’m also feeling overwhelmed because I’ve inherited all my Dad’s assets and I’m not sure what to do.

I don’t know how all this will work out with taxes, so I’m thinking we should go ahead and finally max out the 401k (we currently max out the HSA and put 11% to the 401K) and perhaps do an IRA for both of us this year (traditional?)? I will be talking to my dad’s financial advisor eventually, but until then I want to start setting things up to minimize any tax burden this might create.


#2

A few thoughts…

  1. Without knowing your personal financial situation and how much you are going to inherit, pretty much any advice you receive here will be of little value to your actual situation.

1a. Unless you inherit more than $22 million in assets, you likely won’t have to pay any taxes (you may incur several thousand dollars in legal fees instead). That said, if he were drawing down on his IRA/401k he may have mandatory minimums and you’ll have to take those and that will impact your AGI.

  1. You should speak to your father’s financial advisor now. And later. And any time you have a question. That’s what you are paying him or her for.

  2. Sorry for your loss. No amount of money can ever replace family members but they worked hard to pass down financial resources to ease the burden on their future generations. Make smart decisions with the money pile so their hard work doesn’t go to waste.


#3

Thanks, SmartMoney, for taking the time to answer. I don’t have the 22 mil problem, unfortunately :wink: However, my Mom and Dad were both fairly frugal with the modest amount left of their families’ wealth and I hope to make them proud by how I handle things.

“A good person leaves an inheritance for their children’s children.”