No. of Recommendations: 1
not007: "My grandfather died and left me $800,000."

My condolences on your loss.

"At this point, I have a total of about $3 million including house (worth about $700,000 - I paid off mortgage on house), that 800K and 1.5m in brokerage accounts. I have about $200K in IRA and profit sharing account for my 1 man plumbing business."

Whose house? The one you live in or one that you inherited?

"I bring in about $80K from working and we don't take money out of the investment accounts... although we don't save much of the 80K either.

. . .


I really don't know if this is 'a lot of money'. I guess it is. Because most of it came from a couple inheritances, I don't feel it's mine to spend / I live below our means and I want to be able to grow it to have to give to my kids."


I recommend that you read the book, Sudden Money.

http://www.amazon.com/Sudden-Money-Managing-Financial-Windfall/dp/0471380865

While I think that the book recommends therapy too often and too easily and shows little understanding of "safe" withdrawal rates, it still has enough substance to be useful to you.

Also, how do you fund your IRA if you do not save from your 80k?

"Do I take out a mortgage on the house for the tax deduction?"

Almost never.

"More money to invest?"

Perhaps, but probabl not, but not really enough information to know.

"My accountant talks of variable annuities."

As someone has already noted, do not take investment advice from your accountant. And if your accountant is trying to sell you an annuity, find another accountant.

As another poster has noted, you hire an estate planning lawyer for your estate planning work. And as also previoulsy noted, it is not fire and forget but a plan that must be adjusted as your situation changes and/or as the tax laws change.

OTOH, you seem too fixated on minimizing taxes but your real goal should probably be to have the most remaining after paying taxes.

There are lots of way to minimizee taxes that do not necessarily leave you with more money. Based on what you have written, you will want to avoid those choices.

Regards, JAFO

Disclaimer

Yes, I am a lawyer, BUT an estate planning lawyer AND THIS IS NOT LEGAL ADVICE; it is only general information. NO CLIENT RELATIONSHIP IS INTENDED TO BE CREATED, NOR IS ANY SUCH RELATIONSHIP SO CREATED. FOR SPECIFIC LEGAL ADVICE YOU SHOULD TALK TO A LAWYER IN YOUR AREA.
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