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My Grandfather passed away, and I believe he had a $10k life insurance policy with me as the beneficiary (one for each of his grandchildren).

I am currently in the highest federal tax bracket.

I know nothing about this stuff, except that I believe there is no inheritance tax on this (because of the amount, if nothing else).

Will I need to pay income tax on it? Are there ways I could handle the money (once I receive it, assuming I receive it) that will relieve the tax burden? I do NOT qualify for a traditional IRA, so that's out. I could put some of it in my ROTH, and some in DH's ROTH, but that's not my preference.

Any information would be appreciated.

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