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Most Firms Still Mistreat Inherited IRAs, Causing Financial Loss
As detailed in the article, "Be Alert for IRA Troubles", it usually makes no sense to put an inherited IRA in your name, even when you inherit that IRA from your spouse or your parents. Most banks, mutual fund companies and brokerage firms either do not know or ignore the fact that putting the IRA in your name causes an immediate distribution, which is taxable, and eliminates future tax-deferred growth within the IRA.
Now, a few firms are waking up to the consequences. Schwab and Fidelity now join Vanguard and Solomon Smith Barney in giving beneficiaries a choice. This action is expected to put pressure on other firms to allow investors to choose. Meanwhile, however, investors beware of the significant financial consequences that can result from poor IRA planning.
Source: On Wall Street, March 31, 1999
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Sponsored by James J. Eccleston, an attorney representing stockbrokers, financial planners and
investors nationwide in arbitration, litigation and regulatory matters, and a shareholder with the law firm
Shaheen, Novoselsky, Staat, Filipowski & Eccleston
P.C.(www.snsfe-law.com). This Web site contains material
of general interest. It is neither intended to, nor constitutes, either legal advice or investment advice.
Always consult an attorney and/or investment advisor when building and protecting your wealth.
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