"Turns out that if a person leaves you an IRA or an annuity, taxes are taken out prior to you getting it."

That depends on what you do and how & when you do it.

Inherited Traditional IRAs are taxable income to the recipients...but can be taken out over a 10-year period. The trick is to take out the MINIMUM for the first nine years, and have the distributions occur on December 15th every year. If everything goes right, you should see roughly double what you inherited.

Usually inheritors will get the proportional part of every investment. If there are 4 equal heirs, each gets 25% of everything. But if the IRAs are cashed BEFORE being split, all taxes are due NOW.

Even a Roth IRA, which doesn't have RMDs, has RMDs if it's inherited...and on the same 10yr timeline.

Because I inherited back in 2002, I get to stretch mine out to my lifetime. I've already pulled out about $11,000 from the $9,000 I inherited, and the current balance is around $8000...though it's taken a...ahem...hit in the last few weeks!

"my parents did a Revocable Trust. Not sure what that gets them."

Fees. Lots of fees.

The Trusts I see are a better deal for the administrators, than the holders.

Many years ago, when the IRA amount was $3000 per year, I divided that by 12, and set up automatic investments for $250 the first of every month.

In doing my studying for my fledgling tax business, I discovered that is called dollar-cost averaging, and it leads you to buy more shares when the price is lower, and fewer shares when the price is high. As long as the investment ends up, you've usually done better than if you're trying to time the markets.

Armed with this new knowledge, I went to my dad, and asked him (very hautily), why HE didn't dollar cost average!!!

"Oh, I do son...every January 1st".

It took a while, but when the light bulb finally went on, I realized he was waaaaay ahead of the rest of us. He figured out he'd only have to come up with the maximum ONE TIME, max out in January, then go back to saving $250 a month, so he'd be able to max out NEXT January. Meanwhile, the February investment had lost any gains from January, and the gains on those gains into perpetuity. March, I'd missed two more months. April, three MORE months, etc.

Then I asked myself: What is this, writ large? So I tracked twins: He maxes out on January 1st; she maxes out on the last day, April 15th of the following year. He starts at 20; she starts at either 21 or 22, depending on when the birthdays fall. But both make exactly the same money, and both put away exactly the same amount, according to the tax return.

Who has more money when they hit 70? Well, he does, of course. But HOW MUCH more?

Six figures.