how can you avoid taxes on a 401 k inheritance 
if you inherit a 401 k from a spouse the conventional wisdom is to roll the sum into your own individual retirement account ira this allows you to defer taxes until you start taking distributions if you inherit from a parent it s a little more complicated the first step should be to consult the plan documents to determine what options are available most advisors caution against a lump sum distribution which would incur greater taxes than you would otherwise a five or 10 year distribution allows you to spread out the tax burden and allows interest to compound some plans also allow distributions over your calculated life expectancy under very specific conditions can you protect an inheritance from a chapter 13 bankruptcy if you receive an inheritance within 180 days of filing chapter 13 bankruptcy your trustee may require you to pay the sum into your bankruptcy plan it s more complicated for inheritances received more than 180 days after a bankruptcy filing most courts have ruled that these windfalls should be repaid to creditors but some courts have allowed the inheritor to keep the money 