I'm not planning on going anywhere anytime soon, but I have some questions about this morbid topic, and I'm not really sure who to ask about them, so everyone's old pal Reddit seemed like a good place to start.
If you have a 401k, and a Roth, and pass away - what happens to that money? That is, when it's passed to your benefactor, how does it work? Do they need to keep it as is in a retirement account until they reach the appropriate age? Is there a penalty or tax when it transfers?
Also, concerning life insurance - Let's say you have a small $100k policy - if you have a policy that is paid out to your benefactor, is that money taxable? Will they get the full 100k and have to pay later or is it taxed up front? What would it end up looking like after any potential taxes?
Lastly, What about stocks/bonds/funds? Do they transfer as is without any tax until gains are realized?
It's probably worth noting that I am asking about the rules within the US - NJ specifically.
Submitted October 09, 2024 at 11:44PM by TheMoonstomper https://ift.tt/nCexHtT
