Need help on inheritance

[Zane2011]

I live in South Carolina.

Hello and thank you for some direction.
My mom is dyeing and I have to help her make out her will. I have two main problems her IRA and home. She has said if it isn't too much trouble we could just put everything in my name. I'm ok with this; I like to know what I need to be prepared for as this is a very troubling time for me. I don't Have much extra money myself and I am trying to keep from be liable for her unsecured debit...couple department stores and medical bills. I going to run a credit report to see just how much there might be??

in short, should she make a will saying everything is mine or if possible just sign over into my name?
When it comes to mom's IRA of 50k I want to keep from paying a penalty, can it be transferred into a Roth in my name without penalty?



The Home has partial owner attached to it. Many attempts has been made and Money has been paid to have partial owner to sign over 1/16 of ownership. And every time the signature never gets done even though in good faith funds have been paid. This partial owner doesn't not make themselves available and has defrauded mom on several occasions on this issue.

if i am rambling, forgive me very worried I am about to have a huge mess.. help set me straight.. plz

 

[curb1]

Your mother needs to list you as the beneficiary on her IRA. Then when she dies that money will transfer to you. If you want to keep from paying taxes on the money, you need to have the assets transferred directly from her IRA institution to the institution of your choice for your new IRA. Call that institution and they will explain the procedure exactly for you. Is this a Roth IRA that your mother has?

You will not be liable for your mother's debts. The debts might be claimed/deducted from her estate.

 

[LdiJ]

I live in South Carolina.

Hello and thank you for some direction.
My mom is dyeing and I have to help her make out her will. I have two main problems her IRA and home. She has said if it isn't too much trouble we could just put everything in my name. I'm ok with this; I like to know what I need to be prepared for as this is a very troubling time for me. I don't Have much extra money myself and I am trying to keep from be liable for her unsecured debit...couple department stores and medical bills. I going to run a credit report to see just how much there might be??

in short, should she make a will saying everything is mine or if possible just sign over into my name?
When it comes to mom's IRA of 50k I want to keep from paying a penalty, can it be transferred into a Roth in my name without penalty?



The Home has partial owner attached to it. Many attempts has been made and Money has been paid to have partial owner to sign over 1/16 of ownership. And every time the signature never gets done even though in good faith funds have been paid. This partial owner doesn't not make themselves available and has defrauded mom on several occasions on this issue.

if i am rambling, forgive me very worried I am about to have a huge mess.. help set me straight.. plz

The IRA - you can inherit an IRA and roll it over into an IRA of your own (traditional if its a traditional IRA) without any tax issues but you cannot do that prior to your mother's death. If she names you as the beneficiary of the IRA it will pass to you outside of her estate. I would recommend that your mother get the paperwork from the company to put you on it as her beneficiary.

The House - It probably is not to your advantage to have the house transferred to you prior to her death and she likely cannot do so anyway if there is another owner with an interest in the house. There is also the possibility that the house will pass to the other owner if the deed is worded as joint tenancy with rights of survivorship.

Depending on how long she has owned the home and her basis in the home, it would likely be better, taxwise, for you to inherit it rather than to have it transferred to your name. Consult with a real estate attorney with a copy of the deed in hand.

 

[anteater]

I'd like to clarify what has been said regarding the IRA.

The IRA - you can inherit an IRA and roll it over into an IRA of your own...

Since the OP is not the spouse of the IRA owner, the OP cannot literally roll the IRA into an IRA of his/her own. The IRS would consider that to be a complete distribution. If the OP is the beneficiary, after mother passes away, the IRA would need to be re-titled as a beneficiary IRA - something like "Zane2011's Mother's IRA (deceased), for the benefit of Zane2011."

If you want to keep from paying taxes on the money, you need to have the assets transferred directly from her IRA institution to the institution of your choice for your new IRA.

While the OP can do a trustee-to-trustee transfer, it is not necessary that it be done. And, if he/she does wish to do that, he/she must be careful about the titling of the inherited IRA, as mentioned above.

Distributions from the inherited IRA will be subject to income tax but not subject to an early distribution penalty.

If a traditional IRA, the inherited IRA cannot be converted to a Roth.

 

[Zane2011]

Your mother needs to list you as the beneficiary on her IRA. Then when she dies that money will transfer to you. If you want to keep from paying taxes on the money, you need to have the assets transferred directly from her IRA institution to the institution of your choice for your new IRA. Call that institution and they will explain the procedure exactly for you. Is this a Roth IRA that your mother has?

You will not be liable for your mother's debts. The debts might be claimed/deducted from her estate.

Traditional I believe, Just a regular IRA, It's been moving around with all the bank closures.. I may need ever dime of it for Funeral Cost and taxes on the home. The Tax on the home currently is only like $600 but when it transfers to me it will go UP to about 1k or more.

It seems one can not avoid some type of tax or penalty on mom's IRA if cashed out or inherited; Am I reading this right? I was thinking that I would have to pay taxes up front because, every time she pulls from it they charge her a nice tax on it. I don't how much the tax is at the moment, but she always complains about it being too much.

Mom's owns 90% and this home went thru probate as my father did not have "will" I was giving a partial part and my half sister. I signed over my part to moms afterwards so she could have 100% but the sister never would or did. No good faith has ever been established or has the sister never invested in the family unless to con- something from the family. Mom want to cut all ties to this person after tried to make things right in the past; This only lead to deception, 10k loss and heart ache for her.

Thank You for the Help!

 

[anteater]

It seems one can not avoid some type of tax or penalty on mom's IRA if cashed out or inherited; Am I reading this right? I was thinking that I would have to pay taxes up front because, every time she pulls from it they charge her a nice tax on it. I don't how much the tax is at the moment, but she always complains about it being too much.

If it is a traditional IRA with all pre-tax contributions (that is, the contributions were tax deductible when mother made them), then the distributions are taxed as ordinary income. So, the applicable tax rate depends upon all other income and deductions. Distributions from inherited IRA's are not subject to the early distribution penalty.