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I am planning on reviewing the current setup of my will, trust and beneficiaries. My assets are divided into the following:
1) 403b accounts
2) Roth IRA accounts
3) taxable accounts
4) condo
5) life insurance policy
The total value is small enough so there will be no federal estate tax.
I have two heirs
1) Sibling 1, who is American
2) Niece (the daughter of sibling 2), who is Canadian.
I have a revocable trust with my two heirs as contingent trustees.
Currently I have the following setup.
1) 403b: Two heirs as beneficiaries.
2) Roth: Two heirs as beneficiaries.
3) Taxable: POD/TOD to two heirs directly or to revocable trust.
4) condo is in the revocable trust.
5) Life insurance policy: Revocable trust is the beneficiary.
Here are my understanding and some questions.
1) 403b accounts. Heirs need to pay tax when withdrawing money. Sibling 1 is only 5 years younger than me, so he can still utilize RMD that is based on his life expectancy, so it will not be impacted by the new law. Niece will have to take money out within 10 years. Since she is not an American, will this be an issue? Can she still RMD the money over 10 years?
2) Roth: No tax issues when withdrawing money. Will there be an issue for my niece since she is not an American?
3) Taxable: No immediate tax issues due to step-up basis. Will there be an issue for my niece since she is not an American?
4) Given that my niece is not an American, is there a better way to distribute the money such as I will only pass money to her via Roth/Taxable but not 403b?
5) Are there any additional issues that you see?
I do plan to talk to the lawyer who drew up the revocable trust but I thought I will ask these questions here first. Thank you for your help.
1) 403b accounts
2) Roth IRA accounts
3) taxable accounts
4) condo
5) life insurance policy
The total value is small enough so there will be no federal estate tax.
I have two heirs
1) Sibling 1, who is American
2) Niece (the daughter of sibling 2), who is Canadian.
I have a revocable trust with my two heirs as contingent trustees.
Currently I have the following setup.
1) 403b: Two heirs as beneficiaries.
2) Roth: Two heirs as beneficiaries.
3) Taxable: POD/TOD to two heirs directly or to revocable trust.
4) condo is in the revocable trust.
5) Life insurance policy: Revocable trust is the beneficiary.
Here are my understanding and some questions.
1) 403b accounts. Heirs need to pay tax when withdrawing money. Sibling 1 is only 5 years younger than me, so he can still utilize RMD that is based on his life expectancy, so it will not be impacted by the new law. Niece will have to take money out within 10 years. Since she is not an American, will this be an issue? Can she still RMD the money over 10 years?
2) Roth: No tax issues when withdrawing money. Will there be an issue for my niece since she is not an American?
3) Taxable: No immediate tax issues due to step-up basis. Will there be an issue for my niece since she is not an American?
4) Given that my niece is not an American, is there a better way to distribute the money such as I will only pass money to her via Roth/Taxable but not 403b?
5) Are there any additional issues that you see?
I do plan to talk to the lawyer who drew up the revocable trust but I thought I will ask these questions here first. Thank you for your help.
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