It’s an uncomfortable conversation, but one that must be discussed.

Many people have all of their basic estate planning issues taken care of, but have you spoken to your kids about any of it? Most people have not. Most people think it is crass or depressing to discuss these issues. Take it from me, it is not, and it is necessary. Your heirs need to know your final wishes and where to find all of your information. Here are a few of the most common problems that occur when a loved one passes on:
What happens to their IRA?
As a non-spouse, you cannot rollover an IRA. You must open an Inherited IRA if you chose not to cash the whole account out and pay tax upon receiving the IRA. Once you open the Inherited IRA, you must then start taking out annual withdrawals based on your life expectancy. These withdrawals will be taxable. If you inherit a Roth IRA, the same rules apply.
What is step-up in basis?
We often use the term “cost basis”, but many people do not know what that means. Further, when you inherit non-retirement assets, you receive a step-up in basis. Here is an example of how it works:
If you paid $250,000 for your home, but it is worth $500,000 when you pass, the $500,000 value is what the home steps-up to for sale and estate tax purposes. This rule applies for mutual fund investments also.

Who knows where all of this financial stuff is?
Contact information for all of your financial professionals should be stashed in the same place as you would keep your final papers. If you would like a Financial Organizer to help you put all of this information together, please contact me at


Comments are closed.