Inheritance questions

[pokerpro43]

I am inheriting $50K from a friend who has a terminal illness. It is a very sad situation but inevitable. She is leaving it to me because she wants me to be debt free going forward in life.

I live in Texas, where there is no inheritance tax. After I pay off my debt I'll have about $23K left.

Have a couple of questions:

1. How long on avg will it take to get my distribution of the inheritance? She has no debt and only one home and very few beneficiaries.

2. what is the most I can roll over to my Roth IRA?

3. Any other investment advice for whatever is left after that is greatly appreciated. I would be willing to assume some risk.

Thank you!

[jpg7n16]

I am inheriting $50K from a friend who has a terminal illness. It is a very sad situation but inevitable. She is leaving it to me because she wants me to be debt free going forward in life.

Wow. Definitely sorry to hear about her situation.

I live in Texas, where there is no inheritance tax. After I pay off my debt I'll have about $23K left.

Do you know what type of account she plans to leave for you? If it's an IRA/401k, you'll have income tax on the amount. If a life policy, you're free and clear. My point is, the type of account/property matters.

Have a couple of questions:

1. How long on avg will it take to get my distribution of the inheritance? She has no debt and only one home and very few beneficiaries.

Varies. If you're a beneficiary listed on an account, that would speed it up. If you're left in the will, that will take longer.

2. what is the most I can roll over to my Roth IRA?

$0. You cannot roll an inheritance to your personal Roth.

You can however, use the funds to make your normal $5k contribution for 2012.

3. Any other investment advice for whatever is left after that is greatly appreciated. I would be willing to assume some risk.

Thank you!

And what would you be planning to eventually use the funds for?

The investing style depends on your goals. Investing for retirement is different than for a home, or for your kid's college tuition, etc.

[pokerpro43]

Inheritance questions

She is leaving me cash. It isnt in the form of a 401K or investment account. I believe I am a beneficiary in her will and am to receive $50K in cash. With that in mind, how long should it take to get a call from her executor? After I pay off my debt, I plan to invest some and save the rest. I'll definitely make my max contribution to my Roth as well.

[jIM_Ohio]

Wow. Definitely sorry to hear about her situation.

Do you know what type of account she plans to leave for you? If it's an IRA/401k, you'll have income tax on the amount. If a life policy, you're free and clear. My point is, the type of account/property matters.


Varies. If you're a beneficiary listed on an account, that would speed it up. If you're left in the will, that will take longer.


$0. You cannot roll an inheritance to your personal Roth.

You can however, use the funds to make your normal $5k contribution for 2012.



And what would you be planning to eventually use the funds for?

The investing style depends on your goals. Investing for retirement is different than for a home, or for your kid's college tuition, etc.

What he said- what type of account are you inheriting?

[jIM_Ohio]

She is leaving me cash. It isnt in the form of a 401K or investment account. I believe I am a beneficiary in her will and am to receive $50K in cash. With that in mind, how long should it take to get a call from her executor? After I pay off my debt, I plan to invest some and save the rest. I'll definitely make my max contribution to my Roth as well.

This will need to clear through probate unless it is gifted to you before your friend dies. Prepare for an 18 month+ effort to get your money if probate is involved. Find an elder law or estate planning attorney to help with the process while your friend is still alive.