Disclaiming money, not responsibility
September 17, 2008 8:59 PM   Subscribe

I need to choose which shells (account types) under which to put the coins (inherited and disclaimed assets), and I am worried that if I choose the wrong one, I will lift it after shuffling to find nothing underneath.

When one parent passed away, her 403b funds went to surviving spouse, who disclaimed a portion to me. The investment company has been advising me on my options for the survivor spouse's share and mine. The conversations have raised a few questions on which some of you may have vast knowledge.

1. Supposedly some or all of the money transferred to spouse cannot be moved from the fund company, because under some 2007 law, the original institution (the employer) could have elected to make it portable but did not. Does this ring true? Is there a more accurate way to put this?

2. Supposedly it makes a great deal of difference which type of legal instrument the spouse's money is put into. If it is put into a "SIP" (savings and investment plan? is that right?) it has spouse's life expectancy associated with it and always will, even after spouse's own death; that is bad news for me, because it will mean the money will be exposed to taxes sooner. If, on the other, it is put into an IRA, it will not have that problem. Sound plausible? Any sources to confirm this account? Any other advantages of one over the other?

3. Apparently my own options are either an amended SIP or an inherited IRA. To my understanding, neither one has a decided advantage (both use my life expectancy). Are there any tax or other reasons to choose one over the other? Again, am I using the right terms?

Thanks in advance! I know you are not my lawyers or CPAs. My main objective is to find a way to research this and talk about it intelligently, including to advisers.

P.S. Of course the shell may be empty for other reasons, but I am trying not to think about that right now.
posted by Clyde Mnestra to Work & Money (2 answers total)
 
Get a financial planner on a fee-only basis. This is the standard Metafilter advice for a host of very, very good reasons.
posted by Inspector.Gadget at 9:10 PM on September 17, 2008


Inspector.Gadget, thanks for replying, but I think it's legitimate for me to ask here. As I said, I am hoping to get a preliminary sense, and I plan to talk to an adviser. I think it's appropriate to learn something prior to that process. I have experience with financial planners, and I know they can be helpful, but I also know that it is much better to speak to them having already some rough idea of the issues.
posted by Clyde Mnestra at 6:27 AM on September 18, 2008


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