Don't Make This Big Mistake With Your Inheritance
Baby boomers will transfer a jaw-dropping $30 trillion in wealth to their heirs over the next 30 to 40 years, and a lot of that wealth will be in the form of IRAs and employer-sponsored plans. Baby boomers widely used these plans to reduce their tax bill over their lifetime, but once you begin withdrawing money from them, the IRS will come knocking for its share.
Planning on buying your dream car, traveling the world, or, more wisely, paying off your mortgage with the money you've inherited in an IRA or 401(k)? If so, prepare to fork over a big chunk of your inheritance to the IRS. While traditional IRAs and 401(k) plans are great tools for saving because they defer taxable income so that more money gets invested, you'll face a big tax bill if you cash in these accounts after inheriting them.
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Source: Fool.com
