I spoke with Fidelity today about my 401K and the pro-rata rule and, again, they verified you all were right on the money when you said if I rolled my 401K into an IRA I couldn't do the back-door ROTH conversions anymore. Since I already did one for this year, I can’t roll until next year at the earliest without messing that all up.The guy on the phone brought up another interesting point. He said on most 401Ks or IRAs there is a 5-year rule if the owner of such dies – in that the beneficiary of said IRA/401K has five years in which to move the entire thing into an “Inherited IRA” or they’ll be forced to distribute the entire thing (kicking off a load of taxes) and send the proceeds to the beneficiary.He also said there are issues now if you have a Living Trust and your Trust inherits your IRA rather than a human being. Taxes are much higher and there are other issues. He told me to google Look Through or See Through Trust along with 401K. I think our IRA’s currently go to spouse and then trust. If we died at the same time, it would be a big issue as we have a lot in 401K’s.New topics. Discuss amongst yourselves... :)Cross posting to Estate Planning board...
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