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DIY estate planning is bad. This is a good example of all of the problems that could have been avoided with professional advice.

Correct me if I'm wrong, but my understanding is that they don't have to pay tax on the inheritance since it is only about $180K ($90K each), right? The threshold above which you have to start paying tax on an inheritance is over a million bucks right?

Inheritance tax is based on the entire amount of the estate rather than what individuals inherit.

He was afraid that if he "invested" the funds in a business project he is doing, that some day she could take part of the business as "income". But if this stipulation in the will isn't legally binding, I guess he wouldn't have to worry about that.

A really bad idea

But can he take the whole $90K out of his inherited IRA? Or does he have to take just a certain amount of distribution each year?

If takes a full distribution, income tax on the full amount will have to be paid in that tax year.

He wants to carry out his father's wishes, and his father has created a difficult situation. If they are on good terms with their step-mother, a compromise offer acceptable to all would be easier to implement. The father's intent was to provide some income for his current wife and an inheritance for his kids. If all agree or there is no legally binding requirement, the intent could be fulfilled with a more practical solution.

A spouse can transfer an IRA into their name, and has other options that are available to children. Disclaiming part of the IRA in lieu of future payments might be an option. A lawyer IS needed and could provide possible options. The lack of professional advice has created this mess. First, they need to understand their legal obligations. Second, they can work on practical solutions.
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