Dear Liz: Does a spouse automatically inherit everything if the other passes away without a will? Answer: Not necessarily. Anything that has a beneficiary designation, such as retirement accounts and life insurance, would typically pass to the person named as beneficiary even if that’s not the surviving spouse. Bank and investment accounts also may have “transfer on death” or “pay on death” beneficiaries. In many states, cars and even homes can be passed with beneficiary designations.
Conversions can’t count against your RMDs, and you’re not allowed to put an RMD into a Roth. Any money you convert to a Roth would, however, reduce future RMDs, since Roths aren’t subject to mandatory distributions. Your heirs wouldn’t pay taxes on inherited Roth accounts, either, although they would be required to drain those accounts within 10 years. Plus, you’re increasing your pool of tax-free money.
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