The Only Things in Life That Are Certain
No Time to Manage Your 401(k)?
B Y Y V O N N E M A R S H , C F P ® , C PA
I
’ M S U R E Y O U ’ VE heard the
saying, “Nothing is certain in life except death and taxes.” It’s kind of true, actually. And my job is to make sure that the “tax” part is kept to a minimum. There are actually several different types of tax triggered at someone’s passing, including estate tax and income tax. Under the current tax code, estate tax only comes into play if you have more than $11.4 million in assets, so for the vast majority of us, it doesn’t apply. But income tax is another story, and that depends on what type of account is inherited and whether beneficiaries have been named or not. Bank accounts and non-retirement investment accounts are not taxable to your heirs. They get a “step-up” in tax basis, meaning any unrealized gains are wiped away, and the inherited assets have a new, stepped up basis. Accounts are retitled into the heirs’ names and they’re done. Easy enough. Pre-tax retirement accounts: These are the MOST complicated accounts to inherit by far. They are taxable to your heirs as they receive distributions. Spouses have the unique ability to combine an IRA with their existing IRA and continue as if they always owned the account. They use their own age for Required Minimum Distribution (RMD) rules and wait until age 70 1/2 to begin taxable withdrawals. Non-spouse beneficiaries can take a lump sum distribution, or withdraw the balance over five years, or transfer the balance into an Inherited IRA and begin taking RMDs based on their age. The most tax-advantageous method is to set up an Inherited IRA. But many times beneficiaries don’t understand these options and inadvertently take a fully taxable lump sum distribution. In that unfortunate circumstance, almost 40% of your hard-earned retirement account could go to the IRS rather than to your heirs. An integral part of financial planning is ensuring that all beneficiaries are properly named, accounts are property titled, and your estate planning structure is in place to avoid accidental taxation at your passing. If your financial professional isn’t talking to you about this critical topic, you should be talking to us instead. Call or email to set your complimentary meeting today.
Marsh Wealth Management, LLC Fiduciary Registered Investment Advisor 504 Ebenezer Road Knoxville, TN 37923 865.622.2162 ymarsh@marshpros.com www.marshwealth.com
Financial Planning & Investment Advisory Services are offered through Marsh Wealth Management, LLC (“MWM”), an independent investment advisor registered with the state of Tennessee. Yvonne Marsh is an Investment Advisor Representative of MWM in the state of Tennessee. Marsh Professional Group, LLC is a TN registered public accounting firm and a separate legal entity from MWM. For a detailed discussion of MWM and their investment advisory fees, see the firm’s Form ADV on file with the SEC at www.adviserinfo.sec.gov.
Stop Guessing and Let the Pros Handle It!
We’ll give you customized investment advice using your plan’s investment options. No IRA rollover needed. Learn more at www.marshpros.com/401k-investment-advice 504 Ebenezer Road Knoxville, TN 37923
865.622.2162
www.marshwealth.com
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HE WORDPLAYERS presents Over the River and Through the Woods by Joe DiPietro on October 10, 11, 17, 18, 24 & 25 at 7:30 pm and October 13 & 20 at 2:30 pm at Erin Presbyterian Church, located at 200 Lockett Road in Knoxville. Nick Cristano, 29 years old, loves his grandparents. He visits them every Sunday. They drive him crazy! Nick’s parents retired and moved to Florida. His sister got married and moved to California. Nick is left in New Jersey with both sets of his grandparents. Of course they love each other, but how can they possibly understand each other? Nick’s family is Italian-American. They have a saying: “Tengo famiglia,” which doesn’t translate very directly into English, but it expresses all the depth and complexities of family. It implies that family relationships provide the reason for being alive. Experience the hilarity and heart-break of this family, which may not be that far from your own. The WordPlayers is a 501(c)(3) theatre company based in Knoxville. Tickets are $15 and are available online at www.wordplayers.org and at the door. Thursdays are Pay What You Can Nights. For more information, call 865-539-2490 or visit www.wordplayers.org.
October 2019 EVERYTHING KNOXVILLE
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