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Inheritance Help

Posted by marita40 (My Page) on
Sun, Oct 24, 10 at 7:26

Can anyone direct me to an up-to-date book or article or website that can start to inform me about what to do with an inheritance? I am 50 and about to inherit a fairly good sized amount from the death of my dad. Since this will be the bulk of my future retirement, I need to make good decisions about where to put the money--and I am really scared because I know so little about this. I do have a long-timer financial advisor, but I want to educate myself as much as possible at this point. Thanks.


Follow-Up Postings:

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RE: Inheritance Help

Just a basic question - is the inheritance going to be a cash payout or in the form of stocks, bonds, etc., that your father held in a brokerage account?

Sometimes with books and the internet it's hard for the novice (or anyone really) to distinguish information that's not pie in the sky and pushing an agenda. Nothing out there clearly tells an individual exactly what they should do with their money step by step. Books and the internet are not tailored to you.

If you trust your long time advisor - have a real chat, discuss your fears, long term goals, and comfort level. When it comes to your money and what to do with it to the best advantage, no questions are dumb.


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RE: Inheritance Help

Thanks duluth (and hello to a fellow Minnesotan!). From what I understand it will be a mixture of cash and stock, mostly cash. I'm a little afraid that I've had too long of a relationship with my financial advisor to get the kind of objective advice I need with this windfall (does that make sense?). I'm thinking of seeking out another CFP for that objective help. If you know anyone in the Twin Cities, let me know. Aargh. . .I hate this stuff!


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RE: Inheritance Help

?? Another CFP ?? Why would you not trust your CFP, who has a fiduciary duty to you? If that's the case, you shouldn't be using him at all, and should find someone else immediately.

There are two pieces I would give you, for what they're worth.

1) If your father was taking ANY distributions from an IRA, you MUST continue these distributions. But you do not, under any circumstances, want to cash out his IRA, which is often the default choice of the Executor or Trustee handling the deceased's estate.

Instead, you should order the IRA to be rolled over into an account in your name. DO NOT mix these funds with any current IRA you have. Inherited IRAs must be titled specifically to avoid issues with the IRS and should always remain a separate account(s) for recordkeeping purposes.

The correct title is: Inherited IRA (deceased's full legal name) FBO (your full legal name). Do not accept any excuses from ANY financial institution that the title is too long and 'won't fit our database'.

FBO means 'for benefit of' and is a legally accepted acronym. The financial institution you choose to set up the Inherited IRA will have the forms for you to fill out to open a new account. They will then contact the deceased's FinInst to arrange for the rollover and transfer of funds.

This way, you don't ever handle the IRA money, and the IRS is satisfied that you did not take an early distribution which requires a 10% penalty and income tax paid.

2) You don't need to be in a hurry to decide what to do with the funds. The market is busy going up and down within a narrow range, and a few months one way or the other aren't going to make a whole lot of difference when you're talking about funds that going to be stretched out 30-45 years in the future.

Feel free to park the money in short-term CDs or a money market fund (only up to the insured limit, please) until you and your advisor decide the best investment allocation for your goals and risk tolerance.

If you want a truly independent CFP, you can search on the Garrett Planning website for the names of advisors in your area. Pls read the FAQs as well as the section "How To Choose An Advisor", and be sure to interview at least two, preferably three CFPs before choosing one.

Best of luck to you going forward!

Here is a link that might be useful: Garrett Planning Network website


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RE: Inheritance Help

Thanks jkom. What I meant is that I'd like another opinion on how to handle my finances at this point. My current financial advisor is a family friend; I've been going to him for over 20 years. I do trust him, but I would value a second opinion as well (not an unusual thing, I think, in any time of great crisis or change). I think you are correct about parking the money at this point and taking my time with decision making.


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RE: Inheritance Help

Where ever you put your money be sure the funds are insured, that is bank or saving & loan or credit union. Then later, then you can move some into other places, and some many be insured, some not.
You can also ask bank trust officers for guidance.


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RE: Inheritance Help

Hi Marita,

What I meant is that I'd like another opinion on how to handle my finances at this point. My current financial advisor is a family friend; I've been going to him for over 20 years. I do trust him, but I would value a second opinion as well (not an unusual thing, I think, in any time of great crisis or change).

VERY reasonable, and a very good idea! I know a professional planner in your neck of the woods who'm I trust very much (I have had him work with me on my *OWN* family financials. You know the saying about 'a lawyer who self-represents has a fool for a client' right? I feel an outside professional's view is always wise as well, even for (and *ESPECIALLY* for) those of us so close to the daily fire we can sometimes loose perspective.)

ANYWAY.... I recommend Greg Gall. Tell him you heard of him from me, and I'm quite sure he'll be very generous in providing a non-soliciting, non-pressure overview of your situation (in full awareness and respect of your existing advisory relationship.)

Gregory J Gall, ChFC
651-777-9335 Office
651-777-9146 Fax
866-240-2478 Toll Free
email: greg.gall@vipfa.com
web page: www.vipfa.com
VIP Financial Associates, LLC
563 Bielenberg Drive Suite 105
Woodbury, MN 55125

Cheers,
Dave Donhoff
Leverage Planner

Here is a link that might be useful: VIP Financial Associates, LLC


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RE: Inheritance Help

"Where ever you put your money be sure the funds are insured, that is bank or saving & loan or credit union."

I agree that parking the money in safe investments is a good suggestion. They say you shouldn't put all your eggs in one basket and it seems as if this would be a way to spread it out a bit.

Another poster in this forum is an ex financial planner (and pastor). He says the best thing you can do is learn to manage your money yourself.

We came into some money awhile back and had our eyes opened up along the way. So many experts who tried to convince us they could manage our money for us far better than we could ourselves. Not so.

One source of info we found helpful was a book written by an ex broker/arbitration judge/securities attorney. "Brokerage Fraud-What Wall Street Doesn't Want You to Know" by Tracy P. Stoneman and Douglas J. Schulz.

After reading this, we were able to see how our (ex) broker was skimming our portfolio. That book was worth every penny and then some.

Here is a link to another Gardenweb thread that might be of interest:

inheritance tax - how much we will pay?

www.thathomesite.com/forums/load/
finance/msg1115494422125.html?23


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RE: Inheritance Help

Thanks for your comments. Dave, thanks for the reference. I'm gathering other recommendations from friends right now, but I may well consult him. Woodbury is very close. I assume he is a person who will do a one-time comprehensive assessment of my financial situation, right? Any clue how much (ball park) such people charge for, say, an hour of time?


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RE: Inheritance Help

Hi marita,

I assume he is a person who will do a one-time comprehensive assessment of my financial situation, right?

Yep.

Any clue how much (ball park) such people charge for, say, an hour of time?

I know he has a "menu" of fee options you can choose from. He certainly won't charge for an initial conversation about his fees and the scope of what you are seeking him to do.

Cheers,
Dave Donhoff
Leverage Planner


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RE: Inheritance Help

"Thanks for your comments. Dave, thanks for the reference."


Good luck with that reference Marita40!


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RE: Inheritance Help

>>Wherever you put your money be sure the funds are insured, that is bank or saving & loan or credit union.>>

Credit unions are NOT always insured. They have their own insurance association called NCUA, and it is not obligatory for credit unions to be members. This is a very common misconception.


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