QUESTION
My mother died and left a traditional IRA a Roth IRA a 401K and a savings account. Unfortunately, she listed my sister as the beneficiary.
Asked on May 05th, 2016 on Estate Litigation - Georgia
More details to this question:
What is the best way to split these assets. The cash in the savings is enough to cover my half. I remember when my father died and left everything to my step mother, she wrote us each a $30,000 check with "Death Benefit" in the memo line. Is this a sufficient strategy? My sister will be writing a check for $173,000.
1 ANSWER
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Assets left to someone through a beneficiary designation belong to the person named as the beneficiary. Therefore, no one is required to “share” these assets with you. However, if your sister wants to share the assets, she may do so. There will be severe tax implications for your sister to cash out the retirement accounts and give you ½ of those accounts. Therefore, if this is something your sister wants to do, she should use the savings account to balance out the distributions. Your sister should probably file a gift tax return this year if she is giving you the money this year as it is a gift from her and not an inheritance to you. She should visit with a CPA before making any moves.
Answered on May 12th, 2016 at 5:54 AM