There is a box on a form that has quietly cost American families more money than almost any other box in finance.
It shows up when someone inherits a retirement account. The custodian sends paperwork asking how you would like to receive the funds, and one of the options amounts to: just send it to me.
It looks like the simple choice. It is presented like the simple choice.
Tick it on a $312,000 inherited IRA and you have added $312,000 to your income for that year. All of it, in twelve months, stacked on top of whatever you already earn, taxed at the top rates you have ever touched.
And there is no undo. A non-spouse beneficiary generally cannot put the money back.
The reason this happens so often is not carelessness. It is that the form offers a fast answer, nobody explains the alternative, and the person filling it in has a hundred other things to handle that month.
So before anything else, the one sentence that matters.
Do not accept a check. Ask for a trustee-to-trustee transfer into a properly titled inherited IRA.
Everything else in this article is refinement. That sentence is the money.