If the child is the direct beneficiary, then all of the IRA assets go to the child upon the mother's death and are subject to income tax. |
If you inherit a checking account with $82,000, then there is no step up in basis. |
Life insurance is an important method of estate transfer to at least consider because death benefits can pass to your heirs essentially free of taxes. |
Our estate tax laws allow the heirs to inherit property with a new cost basis which is equal to the fair market value. |
There are lots of cases where someone names a trust as beneficiary because the husband (or spouse) is a bad money manager. |
These issues are extremely complicated. |
This is not an uncommon type of estate planning. There are lots of people with sizable retirement plans with a single child as beneficiary, or minors as beneficiaries. |
Upon death, heirs receive a step-up in basis. |
We have a lot of cases where couples are in second marriages and each has children of their own. |