My father passed away unexpectedly a few weeks ago and as I’ve unraveled his will and trust, I’ve learned I’m inheriting a little over one million split between cash, retirement accounts, and property. I’m 28, married, no kids, make $130k a year, wife has two more years of grad school ($40k total expense) in which she’ll be making roughly $50k indefinitely as she has a part-time practice for her field, and we live in Seattle, although the property is based in Idaho. Below is a breakdown of incoming assets, netted out for funeral expenses, attorney fees, and my father’s anticipated 2017 tax liabilities. Also, these are the values I’m personally inheriting, split from my brother and aunt whom I share the property with:
$650k inherited IRA (assume $10k minimum annual deduction)
$150k life insurance (non-taxable)
$175k residential home (liquidating this year)
$150k residential rental property (current renter yields $500/m)
$100k commercial rental property (current renter yields $800/m)
Further, we rent and have $75k in liquid assets and $125k in retirement accounts.
My father was working with a financial advisor who charges 150bps on top of mutual fund fees of around 85bps on average. No thanks. I plan to cut ties and manage the IRA myself (obtained my CFA charter last year, so I’d like to think I have some idea of what to do). With that context, I’m curious of what thoughts you all have. I understand this isn’t a “quit your job and live freely” moment, but it’s also a shift in the trajectory of what my wife and I want to do in both the near- and long-term future; note, we’d like to have one kid in five years and adopt a few years later. I’m especially curious of what those who, at a similar age and situation, decided to do in their next steps.
Lastly, I don’t know a lot about umbrella policies and the necessity of them, nor do I know the first thing about working with a realtor when selling a home. Apparently the market is piping hot where his home is, so I expect it to sell swiftly. I’ve also considered opening two 529s and naming my wife and me as beneficiaries, in which we’ll transfer to our kids later down the line. Any insight on all of that, and if that’s allowed for 529s? FYI, because I know someone will say it: we’re already maxing our Roth IRAs, and both my 401k and HSA to lower taxable gross income.
My dad worked his ass off since he was a kid and I feel overwhelmingly fortunate of this legacy. As such I want to be prudent and honor what he did considering he passed at a relatively young age, but I also want to enjoy the freedom he’s provided me because he was a daring and adventurous guy. I came here to learn, elicit ideas, and expand my imagination on what’s now possible due to his hard work. Thanks for the help in advance, team.
Submitted June 15, 2017 at 06:02PM by xxvisceralxx http://ift.tt/2sy0Z1i
