Rules for Inheritances and Making Roth Contributions for Others

[@keithmachado-pp6fv]

Great advice Al. We have pay on death (POD) on everything except the house (which is not allowed in our state). It will make the transfer easier than a trust and avoid probate

[@pware9643]

There IS a case for drawing Social Security past age 70.. up to 70.5 .. IF your birthday is in second half of year, say July.. And you are trying to max out Roth conversions up to a certain tax bracket limit, then taking SS in the year you turn 70 will lower the amount you can put in the Roth conversion.. WHEN you start SS , you have the option to select the start date up to 6 months earlier and get a lump sum for previous months. So if you start in Jan of following year and elect 6 months retro back to age 70, you have pushed this taxable income into the following yr than the yr you turned 70.

[@YourMoneyYourWealth]

Thanks for this - I'll bring it to the fellas when we record next! - Andi

[@keithmachado-pp6fv]

Al is correct. Upon death of the original creator(s) a revocable trust becomes irrevocable and the successor trustee will need to get an EIN (assuming the SS number of original owner had been used). The caller does not need to create a new trust. The trust can sell the stock as Al indicated and pay the tax on the gain. Depending on how the trust is set up, there may be an option to pay some or all of the gain at the trust level if beneficial, but given the large amounts the caller indicates that is likely not optimal given the unfavorable trust tax rates over about $14k of income. Another option if the trust assets are in a taxable brokerage account and not an IRA would be to just move the stock in kind to a new brokerage account in the beneficiary name and sell stock as needed and pay the tax at that point.

[@YourMoneyYourWealth]

Thanks as always for the input, Keith!

[@keithmachado-pp6fv]

If the parents are still living it should be easy to just set up a new account with POD instead of the joint account but then if they become incapacitated it may complicate things unless they also provide a power of attorney or other method of assessing the account prior to death

[@joeyf504327]

Don't leave out the unused catch up contribution rules for 403(b)

[@YourMoneyYourWealth]

Thanks for the reminder!

[@jayedgar8177]

Many banks now won't allow anyone not on the account to deposit checks no matter how small. I imagine this is a problem with taking care of elderly parents. Bank regulations are crazy.

[@YourMoneyYourWealth]

Thanks for the insight!

[@keithmachado-pp6fv]

Good video as always. All day IPAs have lower alcohol vs traditional IPA.

[@YourMoneyYourWealth]

Ah, that explains it. It's the bitterness, not the alcohol content, that I can't take!