Dear Kim,
After my husband died, I discovered accounts and investments I didn’t even know we had. Needless to say, I was shocked – and sad he didn’t trust me enough to keep me in the know. How do I make sense of everything and avoid making costly mistakes?
Sincerely,
Newly Widowed and Overwhelmed
Dear Newly Widowed and Overwhelmed,
Unfortunately, this happens a lot. I’m not sure he didn’t trust you; he just thought he was supposed to do it for your family alone. He didn’t think about dying and leaving you to figure it out. But, now that you find yourself in this position, the first thing I would recommend is putting everything down on paper so you can see exactly what you have. Then, separate them into qualified (pre-tax) and non-qualified (after-tax) accounts. This includes Roth accounts, which, although are after tax, they still have withdrawal rules. The qualified accounts will be taxable if you take the funds out, and there is a penalty if you do so prior to 59 and a half. For 401(k) accounts, the rules are slightly different, so you will want to get professional advice on those before moving them. Those qualified accounts are eligible for a spousal rollover, assuming he left you as the beneficiary. There are rules surrounding those as well, so again, get advice before moving forward.
This would be a good time to look at what investments the accounts hold and make sure they are properly diversified, and the investments meet your goals for the future.
Kim
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