DSI Wealth Management
Senior Wealth Management Advisor
Chad Beck is a Wealth Management Advisor at DSI Wealth Management, a firm dedicated to performing services for their clients, their clients' families, employees and the community. Their strategy begins with a thorough understanding of each client’s values, goals and current financial condition. Chad and his team know the key to a strategic plan is in the implementation and constant updating.
Having started his career in the financial services industry in 2007 at a large Variable Annuity Company, Chad learned a great deal about both the retail, as well as the wholesaling side of the securities business. During his time there, Chad soon realized he wanted to be on the retail side, working face to face with clients and building strong relationships while helping clients to plan for their futures. In 2009 Chad was instrumental in opening a satellite office for the largest regional firm on the West Coast in Santa Barbara, California as the Operations Manager. Before long, he transitioned into a sales role and it was there that he found his niche.
Chad joined DSI Wealth Management in 2011 holding his FINRA series 6, 63, 65 and 7 securities registrations, as well as a Life Insurance License. He is a personal Financial Advisor working with individuals and families to help them realize their long and short term financial goals. Chad completed his college education at the University of Colorado, Boulder, while majoring in Economics with a Business emphasis. He enjoys sitting with clients and learning their greatest fears and financial goals, and then implementing a plan that will help them know he has done the very best to help protect them, while helping them strive towards achieving those goals.
First and foremost, I'm sorry for your loss! As long as the mutual fund was not held inside of a retirement account for your father such as an IRA or 401(k), the inheritance is not taxable to you at all. In fact, you should receive a step up in cost basis, so that if you should decide to sell the position, you will only owe taxes on the amount over and above the value on the date of your fathers passing. If he invested $10K, and on the day he passed it was worth $30K, and you sold a month later for $31K, you would have long term capital gains tax on $1,000 only.
The only caveat to this would be if your fathers estate was over $5+ million. If it is.... you'll need a much more in depth look at what your options are.
If the distribution is being paid out to the trust, then yes, the entire amount is taxable. The amount of money has no bearing on the taxation when it comes to IRA's because they do not fall within the estate tax limit. Depending on how the IRA is funded, you may have an option to take a 5 year payout so that the tax liability can be spread over 5 years versus taking it all in one lump sum during one calendar year.
If assets are being split because of a QDRO, you or your husband will not be subject to any taxation, as long as you roll the portion you've been awarded into an IRA account. If funds are transferred properly, you will be able to take advantage of the tax deferred status until you begin taking distributions at some point in the future. The division of the assets will not show as a distribution on your husbands tax returns either, so he will not be subject to income taxes on the portion you receive.
You are entitled to move your newly established IRA account to any institution you please. As long as you do what's called a "Trustee to Trustee Transfer," you will not incur any tax liability at all. For example, if your old 401(k) is now in an IRA at Fidelity, but you don't have a relationship at Fidelity, you can transfer the account to Schwab let's say, or an advisor you work with or wish to work with and whatever custodian they have a relationship with. As far as the IRS is concerned, this does not count as a contribution or preclude you from making future contributions. You're simply looking to transfer an existing IRA to another institution.
If you ultimately want to remove the funds from the rollover IRA and fund your Roth with the distribution, that's a whole other animal. Under the rules of the Roth conversion, you will have to pay income taxes on the amount you roll into the Roth. This transaction also has no bearing on how much you have already contributed to the Roth, or how much you plan to contribute.
As always, it would be best to consult your tax preparer if you decide you want to do a Roth conversion. If there is a sizable amount in your rollover IRA, you may move into a higher tax bracket should you decide to convert the entire amount in one calendar year. It's always best to have a strategy for how to distribute funds out of a traditional or rollover IRA. I hope this helps! Feel free to reach out for further discussion.
If the family company has a written shareholders agreement, that should outline how the company should ultimately be valued at any given time, as well as the method by which an existing shareholder can sell his or her shares back to the company. If no such language exists, or language that speaks to whether the board or directors of the company have the power to rule on these matters, the majority shareholders should try to come up with a methodology for how to value the company that the seller of shares agrees with. If an agreement can not be reached as to how to value the company, then there are a number of third party organizations that can come in and give you a fair market value after reviewing your books. The downside to this is that these companies are often pricey.