If you live in Israel and receive an inheritance from someone who passed away in America, should those funds go in your name alone… after all, you were the beneficiary… or should you put them in a joint account with your spouse?
The right answer depends on your unique situation. Over the past 30 years of helping individuals who receive USD inheritances (including inherited IRAs), I’ve walked many people through the decision-making process. Here are some points to consider when thinking about titling an inherited account.
Joint Account
Trust between spouses is critical, and one of the ways couples build that trust is by sharing their finances. With all else being equal, putting the money in a joint account can help build and maintain that trust between you and your spouse. Since everything is shared in a marriage, it stands to reason that you merge your money.
However, the inheritance may have come with explicit or implicit instructions to keep the money in the bloodline of the family as opposed to sharing it with a spouse. In that case, you may feel caught between honoring the wishes of the deceased versus putting the money in a joint account.
Individual Account
Putting the money in an individual account can help reduce exposure to risks like future divorce, legal disputes or creditor claims against your spouse, business litigation, or other lawsuits from third parties. (This article is not legal advice; be sure to speak to a lawyer for specific guidance). Depending on the circumstances, an individual account may decrease the chances of third parties (or your spouse) getting hold of the funds without your consent.
Having a nest egg in your own name can also create a sense of security and protection. There’s power and comfort in knowing you have something of your own to fall back on, though the implication of keeping the money in your own name does present a challenge to the trust you have with your spouse.
When making these decisions, it’s important to work with your financial advisor, accountant, and lawyer. Sometimes, even the closest of couples may choose to have separate accounts (particularly when receiving an inheritance) due to tax concerns. If you recently received a USD inheritance and need guidance on the type of account it should go into, go to profile-financial.com/inheritance, and then call 02-624-2788 to see if we can help you.
Douglas Goldstein, CFP®, GFP® is the director of Profile Investment Services, Ltd.www.Profile-Financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for help with your U.S. investment accounts. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc., or its affiliates. Neither PRG nor its affiliates give tax or legal advice Mindset (Learned from mistakes and actively sought improvement)
Published March 21, 2024.