Distribution of mother’s IRA all at once leads to a hefty tax bill
The information in this column is intended to provide a general understanding of the law, not as legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.
Q: My mother’s IRA was payable to her estate. The brokerage firm distributed the funds all at once, and taxes were paid at 39.6 percent. I understand now we could have distributed the funds over a five-year period at lower tax rates. Do we have any recourse?
A: There are lawyers that specialize in suing brokerage firms. You should try to find one of them and determine whether a claim is worth pursuing. But without much more information, it is impossible to say for sure whether you have a claim.
Q: We are guardians of a minor child who lost his parents. The probate judge in Dallas has denied us $12,000 in reimbursements. Every dime was spent on the child’s needs. Fighting this would cost thousands of dollars. The judge did this before, and after paying our lawyers $16,000 to appeal. Is there a way to appeal this decision without it costing the child so much?
A: It would seem that you are stuck having to pay more fees to your lawyers if you appeal the recent decision. However, depending on the size of the guardianship estate, the fees may be justified.
You should be sure to find out from your attorneys exactly what is and what is not allowed as a permissible expense. You should do your best to stay within those guidelines. Clearly, something you have been doing is viewed as unjustifiable by the judge.
You should also explore the possibility of transferring the guardianship away from Dallas County to the county where the two of you and the child now live, assuming you don’t live in Dallas County. You’ll have a new judge who might issue more favorable rulings. Of course, the new judge might rule exactly like the present judge, but it may be worth the effort to get things moved.
Certainly, it would be logistically better to have proceedings held in a court close to your home.
Q: I read in your column that the Transfer of Death Deed form was changed in 2017. However, I have not been able to locate the new form on the internet or the texaslawhelp.org website. Is there a new form? Or can I still use the old form?
A: There is a new form, and this is the version you should use.
You can find it in Section 114.151 of the Texas Estates Code, or on the web at http://www.statutes.legis.state.tx.us/Docs/ES/htm/ ES.114.htm.
This new form was supposed to be an improvement over the old form. But when you read it, you’ll quickly understand that it is very difficult to understand and complete. You may need the assistance of an attorney.
Ronald Lipman, of Houston law firm Lipman & Associates, is board certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to stateyourcase@ lipmanpc.com