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What You Need to Know About Inherited Retirement Accounts

by AOG Wealth Management

AOG Wealth Management is the leading choice for estate planning services in our local area because of our experienced and skilled team of financial stewards. It’s incredibly important to begin estate planning early because it makes a big difference. Proper planning allows you to properly allocate your assets and minimize taxes and other fees. Today, we’ll discuss how to maximize the benefits of inherited retirement accounts:

Know About Inherited Retirement Accounts

Things You Need to Know About

Inherited retirement accounts can sometimes be tricky to deal with, so your beneficiaries need to be aware of a few things. You need to make sure that the custodian transferring the account balance and the custodian who will receive the money in an inherited IRA know what they need to do. You also need to make sure that you take all of the required minimum distributions from the inherited account on time. In addition, make sure that all RMDs were taken by the original account holder. Lastly, don’t comingle inherited IRA accounts with other IRA accounts.

Retirement Account Types

Here’s what you need to know about inherited retirement accounts. With traditional IRA accounts, if a spouse is the primary beneficiary of the account then they can inherit the funds and treat the account as their own. They are not required to take the RMDs if their late spouse was taking them. For non-spouse beneficiaries, they have the option of an inherited IRA. As a financial planning expert, we suggest studying the requirements regarding RMDs for non-spouse beneficiaries.

If you meet certain requirements, Roth IRA accounts have the benefit of tax-free withdrawals. In addition, a Roth IRA has no required minimum distributions at age 70 ½. You can let this account grow tax-free for your beneficiaries. You can pass a 401(k) account to your spouse and they can treat it like their own IRA. Non-spouse beneficiaries, however, need to roll the balance of the plan to an inherited IRA if they are the primary beneficiary.

Our estate planning and tax planning services can help prevent undue financial burdens to your loved ones and can help properly distribute your assets. AOG Wealth Management has over a decade of experience and we specialize in assisting high-net worth individuals, companies, and endowment funds reach their financial goals. We serve many areas including McLean and Washington DC. Call us at (866) 993-0203 to learn more about inherited retirement accounts. You can also ask for a complimentary consultation.

Category: Estate Planning