Now that jimrac has given an example, I understand the point he is trying to make. However, there's a couple of things he doesn't consider. IF you took an inheritance as cash, and IF you kept it as cash, then yes, you could spend it down without incurring income tax. However, if you take that money and invest it, you will pay taxes upon your gains. But you do get that Âstep up basis jimrac is depending upon. But of course, if you allow the account to compound over time without spending principal, you run the risk of incurring estate taxes for your own heirs. You could also buy an annuity, which has some limited tax advantages. Conversely, inheriting an IRA is different. You do not have to cash out an inherited IRA, in fact you should always roll it over into an FBO account in your and the deceasedÂs names. IF the owner was taking distributions, heirs also have to take distributions  but they can take the minimum distribution (Required Minimum Distribution, or RMD) which at young ages is a very modest amount indeed. If the owner was not taking distributions, the IRA can be left intact until age 70-1/2 for the heir. And in the case of an inherited Roth IRA, there is NEVER any income tax, for owner or heirs. Because the gains in the Roth compound tax-free, they win hands-down over any taxable account. The biggest issue is the salary restrictions (higher wage earners are barred from contributing to a Roth, although in 2010 only they can convert any amount they wish to pay income taxes on now) and the low annual contribution amount (although I expect Congress will probably increase those at some point). As my ex-boss, a respected CFP, used to say, "Don't let the tax tail wag the dog!" Tax planning should be looked at in a holistic fashion. Somebody's going to pay taxes, it just depends on who that is, and how much. Frankly, if you had a $1M mutual fund account - and I know quite a few people who do - if you were that concerned about your heirs paying income taxes, you'd set up an ILIT (Irrevocable Life Insurance Trust) for your immediate heirs, and a Bypass or QTIP trust for the future generation heirs.

No, I've never had the nerve because I know there could be something of importance I might need later, maybe years later. I normally through all of it away anyway, but don't have the nerve to throw it away not looked at one more time. I remember years ago, I worked for a woman who was a complete mess. I mean her desk looked like a tornado hit it, all the time. I don't know how she functioned. She'd ask me to organize it when she'd be out of town so when she came back everything would be nice and neat. Well, I got so tired of filing what I considered junk, I decided to throw something away that I had picked up numerous times and thought, this must be junk. Well guess what, she asked for it a while later and of course I had pitched it. After that incident I'd just take all her stuff, throw it in a cardboard file box, put it in storage and then when she asked for it, I at least had it in storage. After a year if she didn't ask for the stuff, I threw all of the contents away!!

I dont mind it, but I do march to the beat of a different drummer. I absolutely detest the non-wanted gifts. If I stated no gifts, that would be what I meant, but I know that some people feel they really need to reach out and if that were the case, I'd prefer they donate to charity-even if it's their own choice. I don't really celebrate my birthday-my kids threw me a surprise party for my 50th and it was amazing. I did throw myself a 40th birthday party-it was shortly after my Dad had passed and I needed to celebrate life-but other than that, annual birthdays are just passed with a kiss from my husband and calls from my kids. I don't even like receiving cards because I just feel guilty about recycling them! The exception being for special occasions-I keep sympathy cards because those still bring me comfort. However, mentioning that Facebook thing-it comes up and asks you if you want to create a fundraiser for your birthday and they'll donate a couple bucks in your name. This year, in light of the current Administration and a group that is especially important to me being attacked, I set one up for that. I was brought to tears by the generosity of my friends-the goal amount was exceeded-I honestly thought nothing would be donated. I now know that rather than getting some 'gift' I really, really don't want, some good will be done instead.

Tina Marie - no, I'm a Canadian living in Australia. Mostly, I couldn't care less about the Royals and their activities. I'm hopeful that both my countries will become republics in my lifetime. Although there's a fair bit of coverage of the family here in Oz, I only got interested in the subject when it appeared my Canadian taxes (which I still pay) might be diverted to pay for Harry's security in BC while he sat on a multi-million dollar inheritance. That didn't sit at all well with me, or with most Canadians, and probably colored my views. Part of my skepticism though, has nothing to do with Harry and Meghan specifically, but with charities in general. You look at the books for a lot of them, and in some cases surprisingly little of the money raised or donated goes to actual causes; the rest is absorbed by "administration" - advertising, salaries, overhead, etc. I'm very selective about who and what I donate to these days.