My husband passed away and the company he worked for sent me benefit information regarding his ESOP account. I am only 40 years old and it is less than $5,000.
No attorney will be able to give you specific advice on this forum. The attorney or CPA will need to review the "information" in order to give you an opinion. In the worst case, the tax on $5000 of income should not be very high.
This is not intended to be legal advice, and is general in nature.
Sorry for your loss. I agree with the other answer that $5000 isn't a lot. It is unlikely that there would be tax due but if there is, it wouldn't be a significant amount. You may want to call a probate attorney for a consultation.
You need to consult with a tax attorney or at least a CPA who can answer your question based on all your particular facts and circumstances. This forum is for the purpose of providing answers to general questions and not to give legal advice.
Good luck and sorry for your loss.
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Whether you take it now or later it will still be subject to income tax.
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Just to add to the excellent answers already posted, you can assume that it will all be ordinary income to you in the year that you receive it. As a general matter, it will be added on top of your other income and so will be taxed at the highest rate you are personally at in the year in which you receive it. That rate may be higher than you think.
If you don't need the funds now, any good brokerage house (Fidelity, etc) can help you "roll over" the amount into your own IRA, so that the money will continue to accumulate income and grow, tax free. And you will not have to pay any income tax on it, or the growth, until the government starts making you take distributions at age 70 and 1/2. You are the same ago as my daughter, and I am so sorry for your loss. I would tell her that if she can find a way to do without the money, roll it over into her own IRA, let it grow, add to it as best she can every year, and prepare for her own retirement. The average net worth of a person age 65 in the US is $51,000. That isn't enough. Leave the money there, roll it over into your own IRA, and start saving for the future. It may be hard, but you have already been dealt some pretty hard cards, and you are surviving. Keep up the good work. (By the way, standard disclaimer, nothing herein creates an attorney client relationship, and since I have not had the opportunity to find out the facts, So don't rely upon anything I say, use it as a basis to go talk to a retirement planning expert that the company or Fidelity, Schwab, or one of the other houses can provide). And one more thing that will make me unpopular. Don't let someone sell you an annuity, particularly not as an investment inside your IRA. No explanations needed. Just say no.
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