No. of Recommendations: 0
Amijo: You wrote, in part, "My husband and I are in our 60s. Last year when we went to the Financial Planner who did our income taxes, he told me that if my husband were to die, I would immediately owe $97,000 in taxes to the Govt on his IRA. His IRA is around $300,000."

You do not giv many details, and I am ccertainly no expert, but this does not sound correct to me.

As I understand the US estate taxes, there is still an unlimited marital deduction, so federal estate taxes should be zero if your husband leaves everything to you. Of course, doing so would waste his lifetime exemption, which is a separate estate planning issue.

Someone will owe income taxes on the IRA when the money is withdrawn (assuming that it is not a Roth). I know just enough to know that the withdrawal requirements are different if the IRA is left to the surviving spouse as opposed to some other beneficiary, but that is about the extent of my knowledge.

There are several regular posters with much more knowledge on this topic and I am sure they will chime in.

My suggestion is to consider hiring an knowledgeable estate planner. No offense to "the Financial Planner who did [y]our income taxes," but income taxes and estate planning are two different issues.

Hope this helps. Regards, JAFO

DISCLAIMER: Yes, I am an attorney, but the preceding was only a general discussion and did not constitute legal advice or establish an attorney-client relationship. You should speak to an attorney in your locale for specific legal advice.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.