More than 25% of U.S. wealth is held in the form of IRAs and tax-deferred employee benefit plans. In fact, over one trillion dollars is poised to transfer to baby-boomers over the next 10 years in the form of tax-deferred investments.
IRAs are now one of the most valuable assets to pass wealth from one generation to the next, since current law permits non-spouse beneficiaries to “stretch-out” required minimum distributions over their lifetime.
One of the biggest breakthroughs in estate planning during the past few years was the creation of a stand-alone trust for IRAs, 401(k)’s and other retirement assets. This trust strategy was developed to provide better estate planning options for retirement assets, is based on federal law, and has applicability in all states.
For many families, securing maximum income tax-deferral and protecting an inherited IRA from the potential claims of a beneficiary’s creditors, predators, and divorcing spouses, is now a prime planning objective for affluent clients.
However, the ultimate value of an inherited IRA often depends on how well informed the beneficiary is and the decisions which are made soon after inheriting an IRA. While the ability to compound IRA investments, income tax-free, over the life of a beneficiary often makes good sense, the sad truth is that most beneficiaries are ill-prepared to inherit an IRA. In many cases, individuals “cash-out” their inherited IRA, and are left with a mere fraction of what could have been received over their life.
Trust and estate planning attorney Philip Levin, Esq., principal of The Levin Law Firm, will detail eight (8) practical reasons why naming individuals as beneficiaries of inherited IRAs often create a host of unforeseen and unexpected problems. Phil will also discuss the IRA Inheritance Trust, specifically designed to achieve maximum income tax-deferral, through “stretch-out” provisions, and protect inherited IRAs from potential loss.
If you are the beneficiary of an inherited IRA now, expect to inherit an IRA in the future, or advise clients about navigating the complex rules and regulations surrounding inherited IRAs, please consider attending this live meeting.