Do I have to liquidate her IRA to pay off her debts? If so, Who pays taxes and penalties? Are these based on my income since she is deceased?
2006-12-19 09:37:15 · 7 answers · asked by mom 1 in Business & Finance ➔ Personal Finance
Everyone gave some good answers in part. First, just check with an estate attorney to determine how involved this all is. You can usually find some attorneys who are willing to charge a very minimal fee for a half hour or an hour of advice.
Yes, you can also check with the institution managing the IRA. They can give you information about it.
The most important thing becomes this though. Did your mom have a will? Were you named executor? If you were named executor, then you can, and are expected to manage her matters. If you were not named executor, you cannot manage her matters, even if you want to. If she had no will, then her estate goes to the probate court to determine how her monies will be disbursed. They may go to pay off debts, they may go to her survivors, but the court will decide that.
The IRA is no longer considered an IRA as far as how the money is redirected. In other words, it will not become your IRA for instance. It does have to be liquidated, but who does it and where the money goes is up to the executor or the court and the laws governing payment of debts of deceased persons. Smaller creditors may forgive a debt, but it is not likely that the Federal or a State governmental entity will forgive her debt. It is likely that those debts will need to be paid. They are, after all, the government! The taxes have already been determined based on her income up until her demise. The taxes are not based on your income.
2006-12-19 10:32:22 · answer #1 · answered by Venice Girl 6 · 0⤊ 0⤋
In most cases you do not have to liquidate her IRA to pay her debts but it depends on if your name was attached to any of her debt. If it was not than you are won't need to do anything with the IRA because her debt belongs to her and the creditors are just out that money. My Mom and Dad left a huge mortgage $100,000+ and several assorted credit cards with high balances. I had to call these places and tell them that they had passed away and some of the creditors asked for a copy of the death certificate but not all of them did, after that they simply wrote off the debt. In short if your name is not on the debt you don't have to pay anything. I'm sorry for your loss, Good luck.
2006-12-19 09:51:33 · answer #2 · answered by tpbthigb 4 · 0⤊ 0⤋
Well since she passed the tax will be taken from her funds before they are released... not to sure if any penalties apply due to her passing. Since she had no other property most major debters will settle. Talk with her agent at the company she had the IRA before making any guarentees. Most debters cant collect now that shes passed.
2006-12-19 09:47:38 · answer #3 · answered by porkchop 2 · 0⤊ 0⤋
first of all if you mother did not put you name or giving you power of attorney. it will probable end up in probate court all creditor will have to be payed first.it does not have anything to do with you income her creditor are under her social security number.
2006-12-19 09:47:00 · answer #4 · answered by MIMI2 1 · 0⤊ 0⤋
Get an attorney that specializes in estate law.
Your income should not be effected.
2006-12-19 09:40:49 · answer #5 · answered by Teresa V 3 · 0⤊ 0⤋
I think you should direct this question to IRA directly! They should be able to assist you on these matters!
www.iras.gov.sg
2006-12-19 09:44:02 · answer #6 · answered by LAB 1 · 0⤊ 1⤋
Consult an attorney. They can help you.
I'm sorry for your loss.
2006-12-19 09:44:36 · answer #7 · answered by Starla_C 7 · 0⤊ 0⤋