Legal Question in Wills and Trusts in New York

My cousin and I are co-executors for our Aunt's estate in NY. We are also the only two beneficiaries on her Vanguard retirement account. It has been over 1 year since her passing and we are still waiting to sell her house and settle the estate. Her lawyer is now telling us (not a year ago) that we can cash in or rollover her retirement at any time and take the money. The amount will be deducted from the total amounts we were each left in her will. We thought he originally said the retirement would be liquidated to her estate account, added to all her other assets and then distributed to the people in her will. If we split the money now and don't choose to roll into another IRA, wouldn't we have to claim that as income. Why can't the estate absord that "penalty". Is our other inheritance taxable as income? I ask this because we seem to have gotten conflicting info.


Asked on 2/26/10, 8:45 am

1 Answer from Attorneys
Norman Nadel Norman Nadel, Esq.

Based on the facts which you have provided, you will be required to report as taxable income any amount you receive from the retirement plan. (You should consider a roll over which would defer tax until you actually receiver a withdrawal). Without additional information, it is probable that distributions of the property from the estate will not result in any taxable income.

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Answered on 3/03/10, 10:14 am


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