[WSBAPT] Mandatory withholding on tax deferred account paid to Estate

[Eric Nelsen]

Thanks Chris and Jackie--I was leaning toward no withholding but then suddenly wondered if I was forgetting something. No withholding it is. Thanks!

Eric Nelsen
Sayre Law Offices PLLC
206-625-0092

----- Reply message -----
From: "Eric Nelsen" <Eric at sayrelawoffices.com>
To: "WSBA Probate & Trust listserve (wsbapt at lists.wsbarppt.com)" <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Mandatory withholding on tax deferred account paid to Estate
Date: Thu, Feb 26, 2015 4:28 PM

Decedent has a tax-deferred account of about $35,000 that has no named beneficiary and will be paid to Estate. I honestly can't remember the last time I had this problem, if I ever have. The Estate will distribute pretty quickly to the five heirs ($7,000 each), who of course will have to take the money as income and pay income taxes.

Should we opt to allow the 20% withholding from the payment to the Estate, or tell the custodian to send the Estate the entire amount, no withholding, and let the beneficiaries deal with it? Are there significant pros and cons to both options?

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040

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