When people are estate planning, it is helpful to be informed about details of the laws that protect one’s finances. While there is a great deal of good general information available to the public in Maryland, the nuances that affect an individual’s personal circumstances may not be readily apparent. For people to protect their money and leave their families as well off as they can be through the process of estate administration, they may want to know more than the basics about how different types of properties are inherited.
Many people have limited familiarity with inherited IRAs. If a spouse dies, an IRA may be inherited. The original custodian of the IRA must set up an inherited IRA for any non-spouse beneficiaries.
There are special deadlines that need to be honored and many people are not familiar with them. The first distribution must be taken by the end of the calendar year in which the original owner of the IRA died. The inherited accounts must be re-titled as well. And if some of the deadlines are not met by non-spouse inheritors, they may lose up to 50 percent of the value of the IRA.
Not complying with many of the required deadlines may mean penalties and tax-related losses for those in a position to inherit IRAs and other property following the death of a family member. There are many additional details that people who are navigating the world of inherited funds and estate administration may want to negotiate successfully to protect their rights and their inheritance. For most people in Maryland to protect their interests, they may want to become well informed about the laws related to any property or funds they stand to inherit.
Source: wgntv.com, “Your Money Matters: Inherited IRA accounts,” Mike Piershale, Feb 11, 2013