Designating Trusts as Beneficiaries of Your Retirement Accounts. by Caitlyn K. Walters, Attorney at Law

Size: px
Start display at page:

Download "Designating Trusts as Beneficiaries of Your Retirement Accounts. by Caitlyn K. Walters, Attorney at Law"

Transcription

1 Designating Trusts as Beneficiaries of Your Retirement Accounts by Caitlyn K. Walters, Attorney at Law

2 If you have been told that you should never name a trust as the beneficiary of your retirement accounts, you are not alone. Many people have this misconception. Unfortunately, as a result, retirement account owners are missing out on the benefits that trusts have to offer as beneficiaries of retirement accounts in certain situations. Indeed, in some cases, naming a trust as beneficiary could be more advantageous than naming your spouse or your child directly. BACKGROUND ON RETIREMENT ACCOUNTS While your retirement accounts can be a very important part of your estate planning, they were never intended to be a method of transferring wealth to your family after your death. While it is true that, with the correct planning, your retirement account can provide for your family long after you are gone, Congress purpose for implementing certain benefits into our retirement system i.e., tax-free growth was actually to incentivize people to save money during their younger years to be used to support themselves in their later years. Thus, account owners are required to begin taking annual distributions from their retirement accounts at a certain age typically 70.5 years old and will be penalized if these distributions are not taken. Since Congress intended this money to be spent during the account owner s lifetime, incorporating these accounts into your estate plan in order to maximize its ability to care for your family after your death can be complicated. But it can be done. However, it is this complexity that has likely led to the misconception that trusts cannot be named as a beneficiary of your retirement account. While it is true that many times it is advisable, and easier, to directly name your spouse or child as the beneficiary, when drafted correctly, naming a trust of which your spouse and/or child is a beneficiary can provide the same benefits as well as the additional protections discussed below. 1

3 DESIGNATING INDIVIDUAL BENEFICIARIES Naming Your Spouse as Beneficiary Many people believe that it is best to directly name their spouse as the beneficiary of their retirement accounts because, in many cases, upon their death their spouse can rollover the account into their own. This rollover would allow the spouse to delay taking the required minimum distributions until she was 70.5 years old and then upon her death, whoever inherited the account could stretch out the distributions over their own life expectancy. For example, Paul names his wife, Mary, as the beneficiary of his IRA. Paul dies when Mary is 60 years old. Mary can rollover Paul s IRA into her own IRA and delay taking any distributions for 10.5 more years. Mary dies when she is 80, leaving her IRA to their son, John, who is 50 years old. John will be able to stretch out the distributions over his own life expectancy. This will allow the account to continue to grow tax-free and John can spread out the income tax payments over a longer period of time. While this sounds like a win-win situation, there are a few downsides to this method. First, only a spouse is permitted to rollover a decedent s retirement account. In the example, had Paul named John as the beneficiary instead of Mary, John would not have been permitted to delay taking distributions until he was 70.5 years old. Instead, he would have been required to begin taking distributions in the year after the year of Paul s death. Furthermore, when your spouse is named as the beneficiary of your retirement account, it becomes hers upon your death, leaving you without a say as to who should receive your retirement account upon her death. In the example, if Paul named Mary as the beneficiary of his retirement account, Mary could decide to leave the entire account to her second husband upon her death. John, whom Paul most likely would have preferred to receive his money over Mary s new husband, would not receive anything. 2

4 Naming Your Child as Beneficiary In order to avoid the possibility that their children will not receive their retirement account upon their spouse s death, some people directly name their child as the beneficiary of their account instead of their spouse. For example, Paul designates John as the beneficiary of his IRA instead of Mary to ensure that John will receive this money upon Paul s death. John will not be able to rollover this IRA into his own IRA, but he will be able to stretch out the distributions over his life expectancy. However, there is also a potential downfall to naming your child as the beneficiary of your retirement accounts. Your child s option to stretch out the distributions over their life expectancy is just that an option. They are not required to leave your retirement account intact and instead, may withdraw all of the funds at once. While an older adult child may be able to be trusted to make an educated decision regarding his options, a child of only 18 may not be able to be so trusted. For example, if Paul designated John as the beneficiary of his IRA and Paul died when John was 18 years old, John may be tempted to drain the account immediately in order to buy the latest expensive car on the market. He may not be old enough to understand the advantages of leaving the money in an account to grow tax-free. DESIGNATING TRUST BENEFICIARIES While naming a trust as the beneficiary of your retirement account does have its problems, they are not insurmountable. In fact, once these issues are overcome, having a trust as the beneficiary of your accounts and naming your spouse and/or children as beneficiaries of the trust - can yield a much more preferable result than naming an individual. Naming a Trust as Beneficiary Instead of Your Spouse As discussed above, there can be problems with naming your spouse as the beneficiary of your retirement account. Many of these issues can be prevented by naming a trust as beneficiary instead. For example, particularly in second-marriage 3

5 situations, if you would like to avoid the possibility that your spouse will leave the account to someone other than your children upon her death, you will want to consider naming a trust - the beneficiary of which is your spouse - as the beneficiary of your retirement account. This situation would look like the following: Mary is Paul s second wife and John is Paul s child from his first marriage. Paul creates a trust naming Mary as the beneficiary and John as the remainder beneficiary. Paul then names this trust as the beneficiary of his IRA. Upon Paul s death, the trust will receive distributions from the retirement account and then the trust can distribute those payments to Mary. Because Paul has stipulated in the trust document that John will receive the trust assets after Mary s death, and because the distributions from the retirement account are trust assets, Paul can be sure that John will receive his retirement account distributions upon Mary s death. By naming the trust as the beneficiary, Mary does not become the owner of the retirement account and therefore cannot name a different beneficiary to receive the funds upon her death. Even if Mary were to remarry, she would have no authority to leave Paul s retirement account to her new husband instead of John. Furthermore, you may want to consider naming a trust as the beneficiary of your retirement account if you wish to maximize your estate tax exemption upon your death. When you die, in Maryland you are entitled to leave up to $1 million to your family estate-tax free. (NOTE: Currently the federal government allows you to leave up to $5 million estate-tax free, but this number will drop to $1 million on January 1, 2013, unless Congress acts before then). This is a per-person deduction that must be used at the time of your death. Therefore, each spouse can leave $1 million for a total of $2 million to their children estate-tax-free. However, if you leave everything outright to your spouse, who will already inherit everything estate-tax-free because of the unlimited marital deduction, you have wasted your $1 million coupon. Instead, if you leave $1 million in trust for your spouse to use during her lifetime, but which will ultimately go to your children upon her death, you can save them a significant amount of money in estate taxes. For many people, most of this $1 million used to fund the trust must come from life insurance and retirement benefits, making it advisable to name a trust as the beneficiary of their retirement account than to name their spouse outright. For example, in his estate planning 4

6 documents, Paul establishes a credit shelter trust that will be funded with $1 million at his death so that he can minimize the estate taxes John will have to pay upon Mary s death. The trust states that Mary will be able to use the assets in the trust during her lifetime, but that at Mary s death, John will be the beneficiary of the trust. The only money Paul will have to put into this trust upon his death is a bank account of $50,000 and a life insurance policy of $550,000. However, he also has $400,000 in his IRA. By naming the trust as the beneficiary of the retirement account instead of Mary, Paul can ensure that a full $1 million will pass to John estate-tax-free at Mary s death. NOTE: If it is unclear whether you will need to use your retirement account to fund such a credit shelter trust at your death (i.e., you are unsure whether you will have $1 million in other assets that can fund the trust), you can name your spouse as the primary beneficiary of your retirement account and name the credit shelter trust as the contingent beneficiary. This way, if the retirement account is not needed to fund the trust upon your death, your spouse can rollover the account into her name and take advantage of those benefits. But, if it is needed to fund the credit shelter trust, your spouse can disclaim the retirement account, effectively making the trust the beneficiary of the account and ensuring that you have maximized your estate tax deduction. Naming a Trust as Beneficiary Instead of Your Child As discussed above, there are potential downfalls to directly naming your child as the beneficiary of your retirement account. Many of these problems can be resolved by naming a trust, established for the benefit of your child, as the beneficiary of your account instead. One major problem with designating your child as your retirement account beneficiary arises if your child is a minor. Under the law, minor children cannot own property. Therefore, a guardian must be designated to manage their property for them until they reach the age of 18 at which point the guardian will be required to hand over all property to the child to manage on their own. Depending on the situation, the court may need to select someone as the child s guardian. However, by designating the trust as the beneficiary of the retirement account, you will be able to name a trustee of the trust who will be responsible for managing your child s 5

7 money, including the distributions from the retirement account, for their benefit until they reach whatever age you indicate within the trust document. Even if your child is not a minor, designating a trust as the beneficiary of your retirement account can protect your child from himself, his spouse, and his creditors in a way that directly designating your child cannot. By naming the trust as beneficiary, you can be sure that your child does not receive full control over the money at the age of 18 - you can designate any age that you want thus, ensuring that your child does not withdraw the entire account and spend it unwisely before he is able to understand the benefit of allowing the money to grow tax-free over his lifetime. For example, Paul established a trust for the benefit of John and named it as the beneficiary of his retirement account. Paul died when John was 20 years old. In the trust document, Paul stated that Mary, as trustee of John s trust, was to manage the assets in the trust until John reached 30 years old, or earlier if Mary believed John was able to handle the responsibility. Even though John is an adult, Paul has made sure that someone with more experience and maturity will manage the retirement account distributions until John is old enough to make wise decisions. If Paul had named John as the beneficiary directly, John would be able to do with the account as he pleased at age 20 without Mary s supervision and without regard for John s level of maturity. In addition, when you designate the trust as your retirement account beneficiary instead of your child, you protect this money from third parties, including your child s spouse in a divorce or your child s creditors. For example, If Paul designated a trust for John as the beneficiary of his retirement account, if John ever got divorced, his spouse would not have access to the money in the retirement account because it would be protected by the terms of the trust. This protection would not be available to John if he was the direct beneficiary of the retirement account. Furthermore, if John was ever in an accident and was sued as a result, the plaintiff would not be able to access the money in the retirement account if the trust was the beneficiary. Unfortunately, this would not be true if John was the direct beneficiary. 6

8 THE RULES FOR NAMING A TRUST AS A BENEFICIARY The reason that naming a trust as the beneficiary of your retirement plan can be so complicated is that the trust must qualify as a designated beneficiary. To qualify as a designated beneficiary the trust must satisfy four requirements and it must satisfy a fifth one if the trust beneficiaries are to have the option to stretch out the distributions over their life expectancy. First, the trust must be valid under state law. Second, the trust must be irrevocable. This can either be accomplished by will or by stating in the trust document itself that the trust becomes irrevocable upon your death. Third, all trust beneficiaries who will receive money from the retirement account must be identifiable from the trust document itself. This does not require that all beneficiaries be listed by name. However, if not listed by name, they must be easy to determine from the language used and, in particular, it must be clear who will be the oldest beneficiary since theirs will be the life expectancy used to determine minimum distribution amounts. Fourth, documentation of the trust must be provided to the retirement plan administrator by October 31 st of the year after the year of your death. If a trust meets these four requirements, it will qualify as a designated beneficiary; however, the trust beneficiaries will not have the option of stretching out the distributions over their life expectancy. To qualify for that option, the fifth rule that must be satisfied is that all trust beneficiaries must be individuals. As mentioned above, in the case of multiple trust beneficiaries, distributions from the retirement account will be taken out based upon the oldest beneficiary s life expectancy. This can be a problem if both your spouse and your child are beneficiaries of the same trust because your child would be forced to receive distributions over his parent s life expectancy instead of his own, longer life expectancy. Fortunately, through careful coordination between the trust document and the retirement account s beneficiary designation form, the trust can establish separate shares for your spouse and child and, if these shares are named as the retirement account beneficiaries, your spouse and child can take distributions over their own life expectancies. 7

9 It is probably clear to you by now why the misconception that a trust can never be designated as a beneficiary for a retirement account exists. It is a complicated process and one that should be done with careful attention and planning. However, hopefully it is also clear that in certain situations, this complicated process is worth going through since naming a trust as the beneficiary of your retirement account offers your loved ones important protections that are not available to them if they are directly named as beneficiaries. For more information on trusts and retirement accounts, please do not hesitate to contact our office. Caitlyn K. Walters works closely with clients on estate planning matters for young families. To inquire about a Complimentary Initial Consultation, visit our website at, or call (301) Copyright 2012 All information contained in this Brochure is provided for informational purposes only, and should not be considered legal advice. This Brochure contains general information and may not reflect the most recent developments in either Federal law or the law of any state. Anyone who reads this Brochure, clients or otherwise, should seek the appropriate legal or professional advice from an attorney licensed in the reader s state regarding his or her specific circumstances and should not act or refrain from acting on the basis of any content in this Brochure. ( The Firm ) expressly disclaims all liability with respect to actions taken or not taken based on any or all the contents of this Brochure Executive Park Terrace, Germantown, MD fax:

Bypass Trust (also called B Trust or Credit Shelter Trust)

Bypass Trust (also called B Trust or Credit Shelter Trust) Davis & Graves CPA LLP Jerry Davis, CPA/PFS 700 N Main Gresham, OR 97009 503-665-0173 jerryd@davisgraves.com www.jjdcpa.com Bypass Trust (also called B Trust or Credit Shelter Trust) Page 1 of 9, see disclaimer

More information

Funding Options. Life Insurance:

Funding Options. Life Insurance: Living Trusts There are several disadvantages of wills. Wills go through probate and probate can be expensive. It can cause lengthy delays in the distribution of property to your heirs. Your will is open

More information

Planning for Inherited IRAs Using an IRA Trust as Beneficiary

Planning for Inherited IRAs Using an IRA Trust as Beneficiary Planning for Inherited IRAs Using an IRA Trust as Beneficiary 1 of 27 Legal and Tax Disclosure Columbus Life does not give legal or tax advice. Any discussion of federal taxes in this presentation is not

More information

IRAs and Qualified Plan Accounts: Should You Pass Them to Beneficiaries Outright or in Trust?

IRAs and Qualified Plan Accounts: Should You Pass Them to Beneficiaries Outright or in Trust? IRAs and Qualified Plan Accounts: Should You Pass Them to Beneficiaries Outright or in Trust? By Richard M. Morgan & Loraine M. DiSalvo I. Introduction and Summary. Most people today have a significant

More information

The Basics of Estate Planning

The Basics of Estate Planning The Basics of Estate Planning Timothy A. Nordgren Attorney at Law McPherson, Rocamora, Nicholson & Nordgren, PLLC Two Different Phases of Estate Planning Planning in the event of your incapacity (you are

More information

Organizing Your Assets: Estate Planning

Organizing Your Assets: Estate Planning Estate Planning Chapter 8 Organizing Your Assets: Estate Planning In This Chapter, Learn: Whether You Should Have a Will or Trust What Happens if You Don t Have a Will Whether You Need an Attorney to Create

More information

EVERYTHING YOU OWN & EVERYONE YOU CARE ABOUT. An Estate Planning Primer

EVERYTHING YOU OWN & EVERYONE YOU CARE ABOUT. An Estate Planning Primer EVERYTHING YOU OWN & EVERYONE YOU CARE ABOUT An Estate Planning Primer For The Clients Of 7350 Cirque Drive W, Suite 201 University Place, WA 98467 (253) 759 8354 www.ppatpa.com Presented By T. Gary Connett

More information

ESTATE PLANNING AND IRAs

ESTATE PLANNING AND IRAs ESTATE PLANNING AND IRAs The Selection of a Traditional IRA Beneficiary Presented by Edward Jones Trust Company This outline was intended solely to facilitate discussion regarding certain estate planning

More information

10 common IRA mistakes

10 common IRA mistakes 10 common mistakes Help protect your valuable retirement assets Not FDIC Insured May Lose Value No Bank Guarantee Not Insured by Any Government Agency You ve worked hard to build your retirement assets......

More information

Insight on estate planning

Insight on estate planning Insight on estate planning june.july.2004 Irrevocable life insurance trusts 5 things you need to know about to save taxes Should a trust be the beneficiary of your retirement plan? Providing estate plan

More information

Robert J. Ross 1622 W. Colonial Parkway, Suite 201 (847) 358-5757 Inverness, Illinois 60067 Fax (847) 358-7088 Bob@RobertJRoss.com

Robert J. Ross 1622 W. Colonial Parkway, Suite 201 (847) 358-5757 Inverness, Illinois 60067 Fax (847) 358-7088 Bob@RobertJRoss.com Law Offices of Robert J. Ross 1622 W. Colonial Parkway, Suite 201 (847) 358-5757 Inverness, Illinois 60067 Fax (847) 358-7088 Bob@RobertJRoss.com ESTATE PLANNING Estate planning is more than simply signing

More information

BUILDING FLEXIBILITY INTO THE TYPICAL IRREVOCABLE LIFE INSURANCE TRUST

BUILDING FLEXIBILITY INTO THE TYPICAL IRREVOCABLE LIFE INSURANCE TRUST BUILDING FLEXIBILITY INTO THE TYPICAL IRREVOCABLE LIFE INSURANCE TRUST Presented to the Kentucky Society of Certified Public Accountants, 48 th Annual Kentucky Institute on Federal Taxation, November 18,

More information

Estate Planning. Chapter. In This Chapter. Survivorship Interests Payment on Death Accounts. Life Insurance

Estate Planning. Chapter. In This Chapter. Survivorship Interests Payment on Death Accounts. Life Insurance Estate Planning Your estate includes the assets and liabilities you will leave after you pass away. It is important to plan for how you want to pass your estate, including what you want to give away and

More information

Estate Planning. And The Second To Die Program. www.infarmbureau.com

Estate Planning. And The Second To Die Program. www.infarmbureau.com Estate Planning And The Second To Die Program www.infarmbureau.com Estate Planning and the Second to Die Program from Indiana Farm Bureau Insurance A source of satisfaction for most married couples is

More information

David W. Donahue ʜDavid W. Donahue, Jr., CFA

David W. Donahue ʜDavid W. Donahue, Jr., CFA David W. Donahue ʜDavid W. Donahue, Jr., CFA Much is being heard these days about the stretch IRA strategy. This idea is being suggested as the answer to the IRA and estate concerns of many investors.

More information

Overview of Different Types of Trusts

Overview of Different Types of Trusts Overview of Different Types of Trusts Living Trusts The living trust is very popular in America. A living trust helps you avoid the cost and delay of probate. You can also avoid the dangers from jointly

More information

Estate Planning for Retirement Benefits

Estate Planning for Retirement Benefits Estate Planning for Retirement Benefits April Caudill, J.D., CLU, ChFC, AEP Senior Advanced Planning Attorney Advanced Financial Security Planning Northwestern Mutual The Northwestern Mutual Life Insurance

More information

250 West Coventry Court, #210 Milwaukee, WI 53217 (414) 352-9111 Fax (414) 352-9166 www.hoganfinancial.com

250 West Coventry Court, #210 Milwaukee, WI 53217 (414) 352-9111 Fax (414) 352-9166 www.hoganfinancial.com Hogan Financial Management Paula H. Hogan CFP, CFA 250 West Coventry Court, #210 Milwaukee, WI 53217 (414) 352-9111 Fax (414) 352-9166 www.hoganfinancial.com We provide comprehensive, fee-only financial

More information

MEMORANDUM. Barber, Emerson, L.C. BENEFICIARY DESIGNATIONS FOR QUALIFIED PLANS

MEMORANDUM. Barber, Emerson, L.C. BENEFICIARY DESIGNATIONS FOR QUALIFIED PLANS MEMORANDUM Barber, Emerson, L.C. BENEFICIARY DESIGNATIONS FOR QUALIFIED PLANS This memorandum generally explains several principles applicable to qualified plan beneficiary designations. This memorandum

More information

Life Insurance for Estate Taxes THE SIMPLEST SOLUTION TO AN ESTATE TAX PROBLEM

Life Insurance for Estate Taxes THE SIMPLEST SOLUTION TO AN ESTATE TAX PROBLEM Life Insurance for Estate Taxes THE SIMPLEST SOLUTION TO AN ESTATE TAX PROBLEM M any successful individuals are shocked to learn that the federal estate tax may consume as much as 45% of their accumulated

More information

Using Trusts in Roth IRA Planning

Using Trusts in Roth IRA Planning Using Trusts in Roth IRA Planning Presented by Kristen M. Lynch, J.D., AEP, CISP, CTFA Fort Lauderdale & Linda Suzzanne Griffin, J.D., LL.M., CPA Attorney at Law Clearwater 1 TO ROTH OR NOT TO ROTH...

More information

The Advantages of a Stretch IRA

The Advantages of a Stretch IRA Lifetime Retirement Planning with Wachovia Securities. The Advantages of a Stretch IRA Much is being heard these days about a concept called the Stretch IRA. This phrase is bandied about as being the answer

More information

Minimum Distributions & Beneficiary Designations: Planning Opportunities

Minimum Distributions & Beneficiary Designations: Planning Opportunities 28 $ $ $ RETIREMENT PLANS The rules regarding distributions and designated beneficiaries are complex, but there are strategies that will help minimize income and estate taxes. Minimum Distributions & Beneficiary

More information

Modern Estate Planning Made Easy

Modern Estate Planning Made Easy Modern Estate Planning Made Easy Presented March 9, 2011 By Mark J. Bradley Ruder Ware 800-477-8050 mbradley@ruderware.com Ruder, Ware, L.L.S.C. 500 First Street, Suite 8000 P.O. Box 8050 Wausau, WI 54402-8050

More information

Beneficiary Planning Investor Guide. Design a plan for you and your beneficiaries

Beneficiary Planning Investor Guide. Design a plan for you and your beneficiaries Beneficiary Planning Investor Guide Design a plan for you and your beneficiaries Today is an important day. It is the day you will develop a comprehensive beneficiary plan that will let you relax, knowing

More information

The Basics of Estate Planning

The Basics of Estate Planning The Basics of Estate Planning A White Paper by Manning & Napier www.manning-napier.com Unless otherwise noted, all fi gures are based in USD. 1 The Basics of Estate Planning A White Paper by Manning &

More information

Distributions from Individual Retirement Arrangements (IRAs)

Distributions from Individual Retirement Arrangements (IRAs) Department of the Treasury Internal Revenue Service Contents What's New for 2014 1 Publication 590-B What's New for 2015 1 Cat No 66303U Reminders 2 Distributions from Individual Retirement Arrangements

More information

EASY WAYS TO AVOID PROBATE BOOKLET

EASY WAYS TO AVOID PROBATE BOOKLET EASY WAYS TO AVOID PROBATE BOOKLET The Florida Statutes recommend an executor or personal representative s fee of 3%, plus attorney s fees of 3%, of the value of those assets that go through probate in

More information

Taking Your Required Minimum Distributions

Taking Your Required Minimum Distributions RETIREMENT Taking Your Required Minimum Distributions A Guide for Retirement Account Owners and Beneficiaries Taking Distributions During Your Lifetime Most people are required to start withdrawing from

More information

The. Estate Planner. Do you have a liquidity plan? Being elastic can be fantastic. A blended family requires smart estate planning

The. Estate Planner. Do you have a liquidity plan? Being elastic can be fantastic. A blended family requires smart estate planning The Estate Planner January/February 2010 Do you have a liquidity plan? Being elastic can be fantastic Stretch your retirement savings for yourself and your heirs A blended family requires smart estate

More information

BASICS * Irrevocable Life Insurance Trusts

BASICS * Irrevocable Life Insurance Trusts KAREN S. GERSTNER & ASSOCIATES, P.C. 5615 Kirby Drive, Suite 306 Houston, Texas 77005-2448 Telephone (713) 520-5205 Fax (713) 520-5235 www.gerstnerlaw.com BASICS * Irrevocable Life Insurance Trusts Synopsis

More information

The Buildup Equity Retirement Trust or BERT! The Wonder Trust

The Buildup Equity Retirement Trust or BERT! The Wonder Trust Chapter 87 The Buildup Equity Retirement Trust or BERT! The Wonder Trust Cecil Smith (Memphis, Tennessee) and Carol Gonnella (Jackson, Wyoming) 346 The Buildup Equity Retirement Trust, or BERT! The Wonder

More information

Estate Planning: Preparing for End of Life MANAGING RETIREMENT DECISIONS SERIES

Estate Planning: Preparing for End of Life MANAGING RETIREMENT DECISIONS SERIES Estate Planning: Preparing for End of Life MANAGING RETIREMENT DECISIONS SERIES ESTATE PLANNING IS ANOTHER WORD FOR putting one s personal affairs in order. People do estate planning all along life s journey,

More information

Estate Planning. Some common tools used to help meet those particular needs include:

Estate Planning. Some common tools used to help meet those particular needs include: Estate Planning The Importance of Having an Estate Plan Having an estate plan is one of the most important things you can do for your family. It's not just about planning for estate taxes; it's about developing

More information

Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans

Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans WSU Accounting & Auditing Conference Tuesday, May 20, 2014 Presented By: Steven P. Smith Hinkle Law Firm LLC 301

More information

USING IRA ASSETS TO ADDRESS YOUR WEALTH TRANSFER GOALS

USING IRA ASSETS TO ADDRESS YOUR WEALTH TRANSFER GOALS U.S. TRUST FIDUCIARY SERVICES FOR MERRILL LYNCH CLIENTS USING IRA ASSETS TO ADDRESS YOUR WEALTH TRANSFER GOALS Trusteed IRAs from U.S. Trust Working together, Merrill Lynch and U.S. Trust bring you the

More information

Estate Planning and Oil and Gas Leasing

Estate Planning and Oil and Gas Leasing July 2010 1 Estate Planning and Oil and Gas Leasing 700 Security Mutual Building 80 Exchange Street Binghamton, New York 13902-5250 (607) 723-5341 Wilbur (Bud) D. Dahlgren, Esq. Jon J. Sarra, Esq. Ryan

More information

The Revocable Trust in Florida

The Revocable Trust in Florida The Revocable Trust in Florida The revocable, or living, trust is often promoted as a means of avoiding probate and saving taxes at death. The revocable trust has certain advantages over a traditional

More information

TEN WAYS TO USE LIFE INSURANCE (AN ESTATE PLANNING PERSPECTIVE)

TEN WAYS TO USE LIFE INSURANCE (AN ESTATE PLANNING PERSPECTIVE) TEN WAYS TO USE LIFE INSURANCE (AN ESTATE PLANNING PERSPECTIVE) Oregon State Bar Family Law Section Annual Conference October 2013 Kathy Belcher McGinty & Belcher Attys PC 694 High St NE PO Box 12806 Salem

More information

Life Insurance Gifts: Planning Considerations

Life Insurance Gifts: Planning Considerations Life Insurance Gifts: Planning Considerations Gifts of life insurance are an additional option for charitable giving. While life insurance is not the answer to every financial planning and estate planning

More information

The Basics of Estate Planning

The Basics of Estate Planning The Basics of Estate Planning Introduction The process of estate planning can be a daunting prospect. Often individuals will avoid the process altogether. Obviously, this is not the best approach since

More information

Thursday, March 26 2015 WRM# 15-11

Thursday, March 26 2015 WRM# 15-11 Thursday, March 26 2015 WRM# 15-11 The WRMarketplace is created exclusively for AALU Members by the AALU staff and Greenberg Traurig, one of the nation s leading tax and wealth management law firms. The

More information

MYTHS AND MISCONCEPTIONS

MYTHS AND MISCONCEPTIONS TEXAS ESTATE PLANNING Estate Planning and Special Needs Trusts MYTHS AND MISCONCEPTIONS HOW MUCH DO YOU REALLY KNOW ABOUT ESTATE PLANNING? There are a surprising number of myths and misconceptions surrounding

More information

IRREVOCABLE LIFE INSURANCE TRUSTS FOR ESTATE AND TAX PLANNING (Estate Planning Advisory No. 1)

IRREVOCABLE LIFE INSURANCE TRUSTS FOR ESTATE AND TAX PLANNING (Estate Planning Advisory No. 1) IRREVOCABLE LIFE INSURANCE TRUSTS FOR ESTATE AND TAX PLANNING (Estate Planning Advisory No. 1) This Advisory discusses the general estate planning and asset protection benefits of an irrevocable life insurance

More information

A Guide to Living Trusts

A Guide to Living Trusts A Guide to Living Trusts Protect your family s future with a plan The Smart Way to Avoid Probate Who s Who in a Living Trust Trust Anatomy 101 Types of Living Trusts What Goes into a Living Trust Assets

More information

The IRA Protection and Maximization Trust Maximizing Tax Deferred Growth and Asset Protection For Inherited IRAs and 401K Plans

The IRA Protection and Maximization Trust Maximizing Tax Deferred Growth and Asset Protection For Inherited IRAs and 401K Plans 888 Worcester Street Wellesley, Massachusetts (781) 237-2815 phone (781) 237-3141 fax The IRA Protection and Maximization Trust Maximizing Tax Deferred Growth and Asset Protection For Inherited IRAs and

More information

NEW IRS RULING VALIDATES THE IRA INHERITANCE TRUST BY ROBERT S. KEEBLER, CPA

NEW IRS RULING VALIDATES THE IRA INHERITANCE TRUST BY ROBERT S. KEEBLER, CPA NEW IRS RULING VALIDATES THE IRA INHERITANCE TRUST BY ROBERT S. KEEBLER, CPA Why Name a Stand Alone Trust as an IRA Beneficiary? In the world of estate planning, one of the more complex technical areas

More information

IS A TRUST RIGHT FOR YOU?

IS A TRUST RIGHT FOR YOU? : IS A TRUST RIGHT FOR YOU? You take care of your family and work hard for the things you ve acquired. You take the necessary steps during life to ensure your family s security and well-being and to avoid

More information

Estate Planning Basics. An Overview of the Estate Planning Process

Estate Planning Basics. An Overview of the Estate Planning Process Estate Planning Basics An Overview of the Estate Planning Process What Is an Estate Plan? An estate plan is a map This map reflects the way you want your personal and financial affairs to be handled in

More information

Stretch Your Net Worth Take Care of Your Family Take Care of Yourself. The Stretch IRA Concept. from American National Insurance Company

Stretch Your Net Worth Take Care of Your Family Take Care of Yourself. The Stretch IRA Concept. from American National Insurance Company Stretch Your Net Worth Take Care of Your Family Take Care of Yourself The Stretch IRA Concept from American National Insurance Company Stretch Your Net Worth Take Care of Your Family Take Care of Yourself

More information

Charitable Gifts of IRA / IRD Assets The Good, the Bad and the Ugly. Susan C Dunlop Luther Seminar - Gary G Hargroves Thompson & Associates

Charitable Gifts of IRA / IRD Assets The Good, the Bad and the Ugly. Susan C Dunlop Luther Seminar - Gary G Hargroves Thompson & Associates 1 IRD Definition: Charitable Gifts of IRA / IRD Assets The Good, the Bad and the Ugly Susan C Dunlop Luther Seminar - Gary G Hargroves Thompson & Associates Minnesota Planned Giving Conference November

More information

Spiegel & Utrera, P.A. Counselors & Attorneys at Law

Spiegel & Utrera, P.A. Counselors & Attorneys at Law Spiegel & Utrera, P.A. Counselors & Attorneys at Law Offices Located In: Chicago, Dover, DE, Fort Lauderdale, Las Vegas, London, Los Angeles, Miami, New York City, Northern New Jersey, Orlando, Tampa 642

More information

Payment Options. Retirement Benefit

Payment Options. Retirement Benefit Payment Options Retirement Benefit Table of contents Choosing your benefit payment option... 2 Life Annuities... 5 Fixed Period Benefit... 7 Installment Benefit... 8 Combination of Benefits... 10 Single

More information

E S T A T E P L A N N I N G

E S T A T E P L A N N I N G E S T A T E P L A N N I N G HANDBOOK Practice Limited to Trusts, Estates, & Elder Law First National Bank Building, Second Floor 135 Section Line Road, Suite C2 Hot Springs, AR 71913 Phone: 501-525-4401

More information

KURT D. PANOUSES, P.A. ATTORNEYS AND COUNSELORS AT LAW 310 Fifth Avenue Indialantic, FL 32903 (321) 729-9455 FAX: (321) 768-2655

KURT D. PANOUSES, P.A. ATTORNEYS AND COUNSELORS AT LAW 310 Fifth Avenue Indialantic, FL 32903 (321) 729-9455 FAX: (321) 768-2655 KURT D. PANOUSES, P.A. ATTORNEYS AND COUNSELORS AT LAW 310 Fifth Avenue Indialantic, FL 32903 (321) 729-9455 FAX: (321) 768-2655 Kurt D. Panouses is Board Certified by the Florida Bar as a Specialist in

More information

Consumer Legal Guide. Your Guide to a Living Trust

Consumer Legal Guide. Your Guide to a Living Trust Consumer Legal Guide Your Guide to a Living Trust WHAT IS A LIVING TRUST? Most of us share the same objectives for our estate plan: 1) Provide for our spouse or dependent children; 2) distribute our property;

More information

Planning your estate

Planning your estate Planning your estate A general guide to estate planning Policies issued by: American General Life Insurance Company The United States Life Insurance Company in the City of New York What is estate planning?

More information

TRACY CHRISTEN REIMANN, P.C.

TRACY CHRISTEN REIMANN, P.C. TRACY CHRISTEN REIMANN ATTORNEY AT LAW (ALSO ADMITTED IN NJ & DC) TRACY CHRISTEN REIMANN, P.C. 376 ROUTE 202 SOMERS, NY 10589 TEL (914) 617-8447 FAX (914) 801-5909 E-Mail: reimannlaw@optonline.net www.tcreimannlaw.com

More information

Viewpoint. Using a Trusteed IRA to Protect, Preserve and Control Your IRA Assets

Viewpoint. Using a Trusteed IRA to Protect, Preserve and Control Your IRA Assets Viewpoint NATALIE B. CHOATE APRIL 2015 Using a Trusteed IRA to Protect, Preserve and Control Your IRA Assets The first IRAs were created in 1975 and contained no more than that year s maximum contribution

More information

This article focuses on rollovers by a

This article focuses on rollovers by a Rollovers From Retirement Plans and IRAs By Marcia Chadwick Holt This article focuses on rollovers by a surviving spouse and by a nonspouse to retirement plans and individual retirement accounts (IRAs).

More information

SELECTING A DEATH BENEFICIARY FOR QUALIFIED PLAN BENEFITS CREATIVE FUNDING OF CREDIT SHELTER TRUSTS IN THE CONTEXT OF RETIREMENT BENEFITS

SELECTING A DEATH BENEFICIARY FOR QUALIFIED PLAN BENEFITS CREATIVE FUNDING OF CREDIT SHELTER TRUSTS IN THE CONTEXT OF RETIREMENT BENEFITS SELECTING A DEATH BENEFICIARY FOR QUALIFIED PLAN BENEFITS CREATIVE FUNDING OF CREDIT SHELTER TRUSTS IN THE CONTEXT OF RETIREMENT BENEFITS 2004 Julius H. Giarmarco, Esq. Prepared By: Julius H. Giarmarco,

More information

Estate & Wealth Transfer Planning for Blended Families... Yours, Mine, and Ours

Estate & Wealth Transfer Planning for Blended Families... Yours, Mine, and Ours Estate & Wealth Transfer Planning for Blended Families... Yours, Mine, and Ours The new normal With over 65% of remarriages involving children from a prior relationship, 1 blended families have become

More information

Consumer s Guide to. Estate Planning. Planning for Your Family Tree. www.littmankrooks.com. A Publication of

Consumer s Guide to. Estate Planning. Planning for Your Family Tree. www.littmankrooks.com. A Publication of Consumer s Guide to Estate Planning Planning for Your Family Tree www.littmankrooks.com A Publication of Elder Law, Estate Planning, Special Needs Planning 655 Third Ave. 399 Knollwood Rd. 21 Old Main

More information

Organizing Your Finances After Your Spouse Has Died

Organizing Your Finances After Your Spouse Has Died Organizing Your Finances After Your Spouse Has Died Page 1 of 7, see disclaimer on final page Organizing Your Finances After Your Spouse Has Died What is it? Even if you've always handled your family's

More information

SIX REASONS TO HAVE A LIVING TRUST

SIX REASONS TO HAVE A LIVING TRUST SIX REASONS TO HAVE A LIVING TRUST If you've ever thought about a living trust, it's probably because you hate the idea of going through probate. Living trusts have been heavily marketed on that basis

More information

Estate Planning. Maximize the legacy you leave to loved ones

Estate Planning. Maximize the legacy you leave to loved ones Estate Planning Maximize the legacy you leave to loved ones An estate plan is a versatile tool from which anyone can benefit. It is the way you communicate your wishes to the loved ones you leave behind

More information

The IRA Preservation Trust

The IRA Preservation Trust The IRA Preservation Trust New Opportunity in Asset Protection Planning Shawn P. Eyestone May 17, 2015 Disclosure and Legal Disclaimer I do not recommend any investment or insurance products. I do not

More information

From Mark Andres. Blommer Peterman, S.C.

From Mark Andres. Blommer Peterman, S.C. Using Trusts to Protect Inherited IRAs Volume 8, Issue 3 Many clients have large IRAs and retirement plan accounts and need special estate planning for these assets. A 2009 study by the Investment Company

More information

Estate Planning For Everyone

Estate Planning For Everyone Estate Planning For Everyone Boston College Shaw Society Boston College Alumni Association November 20, 2013 Michael J. Puzo, Esq. Hemenway & Barnes LLP 60 State Street Boston, Massachusetts 02109 617-557-9721

More information

Living Trust Overview

Living Trust Overview Living Trust Overview TABLE OF CONTENTS WHAT IS PROBATE AND WHY DO YOU WANT TO AVOID IT? 2 THE HIGH COST OF DYING 2 A REVOCABLE LIVING TRUST ELIMINATES PROBATE 3 HOW A LIVING TRUST WORKS 3 REVOCABLE LIVING

More information

Creating a Lasting Legacy

Creating a Lasting Legacy Picture Placeholder Creating a Lasting Legacy Strategies for effective estate and tax planning Jim Alverson, Director Wealth Planning Strategies Welcome to today s presentation This presentation (including

More information

Charitable Giving and Retirement Assets

Charitable Giving and Retirement Assets Charitable Giving and Retirement Assets Individuals who save for retirement likely own an Individual Retirement Account (IRA), one or more qualified retirement plan accounts (e.g., a 401(k) plan) or both.

More information

Irrevocable Life Insurance Trusts: Perhaps the Best Kept Secret in Tax Savings

Irrevocable Life Insurance Trusts: Perhaps the Best Kept Secret in Tax Savings Irrevocable Life Insurance Trusts: Perhaps the Best Kept Secret in Tax Savings A. Jude Avelino * Life insurance is protection against the death of an individual in the form of payment to a beneficiary,

More information

Common mistakes in estate planning

Common mistakes in estate planning Common mistakes in estate planning Disclaimers The Lyon Group is not in the business of providing tax, legal or accounting advice, and none is intended nor should be inferred from the foregoing comments

More information

Retirement Beneficiary Planning

Retirement Beneficiary Planning Retirement Beneficiary Planning Sara K. Yen, J.D., LL.M. www.yenlaw.com Part I Minimum Distribution Rules 1.01 Lifetime (a) Required Minimum Distributions Everyone determines RMDs by referring to the Uniform

More information

IRA Beneficiaries: Trusts, Estates and Charities

IRA Beneficiaries: Trusts, Estates and Charities Strategic Thinking IRA Beneficiaries: Trusts, Estates and Charities By Kenneth A. Johnson TRUSTS AS BENEFICIARY Frequently, people will desire and be advised to name a trust as beneficiary of their IRA.

More information

An Overview of Estate Planning Strategies

An Overview of Estate Planning Strategies An Overview of Estate Planning Strategies Rehberg Law Group, P.S. Attorneys and Counselors at Law An Overview of Rehberg Law Group, P.S. R ehberg Law Group, P.S. is a law firm devoted to Estate Planning,

More information

The New Era of Wealth Transfer Planning #1. American Taxpayer Relief Act Boosts Life Insurance. For agent use only. Not for public distribution.

The New Era of Wealth Transfer Planning #1. American Taxpayer Relief Act Boosts Life Insurance. For agent use only. Not for public distribution. The New Era of Wealth Transfer Planning #1 American Taxpayer Relief Act Boosts Life Insurance For agent use only. Not for public distribution. In January 2013 Congress stepped back from the fiscal cliff

More information

IRA. Mistakes and Opportunities. Dru Donatelli, JD-MBA, ChFC, CLU. AVP, Field Director, and Advanced Planning Attorney Special Markets

IRA. Mistakes and Opportunities. Dru Donatelli, JD-MBA, ChFC, CLU. AVP, Field Director, and Advanced Planning Attorney Special Markets IRA Mistakes and Opportunities Dru Donatelli, JD-MBA, ChFC, CLU AVP, Field Director, and Advanced Planning Attorney Special Markets Wood Logan Academy We give financial professionals a lot of credit Not

More information

Charitable Gifts of IRA/IRD via a Beneficiary Statement - Good. Charitable Gifts of IRA / IRD Assets The Good, The Bad and The Ugly.

Charitable Gifts of IRA/IRD via a Beneficiary Statement - Good. Charitable Gifts of IRA / IRD Assets The Good, The Bad and The Ugly. Charitable Gifts of IRA / IRD Assets The Good, The Bad and The Ugly Susan C Dunlop Luther Seminary - Gary G Hargroves Thompson & Associates Minnesota Planned Giving Council Conference 11-5-14 Definitions

More information

RETIREMENT PLANNING FOR THE SMALL BUSINESS

RETIREMENT PLANNING FOR THE SMALL BUSINESS RETIREMENT PLANNING FOR THE SMALL BUSINESS PI-1157595 v1 0950000-0102 II. INCOME AND TRANSFER TAX CONSIDERATIONS A. During Participant s Lifetime 1. Prior to Distribution Income tax on earnings on plan

More information

THE USE OF LIVING TRUSTS IN ESTATE PLANNING

THE USE OF LIVING TRUSTS IN ESTATE PLANNING THE USE OF LIVING TRUSTS IN ESTATE PLANNING Margaret M. Hand Law Offices of Margaret M. Hand, PC 1939 Harrison Street, Suite 200 Oakland, California 94612 (510) 444-6044 (510) 444-7044 email@handlaw.com

More information

10Common IRA mistakes

10Common IRA mistakes 10Common IRA mistakes Help protect your valuable retirement assets You ve worked hard to build your retirement assets. And you want them to continue to work hard for you throughout your working career

More information

What should I bring to my appointment?

What should I bring to my appointment? PLANNING YOUR ESTATE How to obtain a will 1. Complete the will worksheet. 2. Meet with an attorney to review your worksheet and discuss special concerns. An attorney will draft the will and related paperwork.

More information

IRA PROTECTION T RUSTS

IRA PROTECTION T RUSTS IRA PROTECTION T RUSTS I NFORMATION PROVIDED BY THE LAW OFFICE OF R ICHARD J. HERNDON Attorney at Law 455 Sam Barr Drive Suite 207 P. O. Box 617 Kearney, Missouri 816-628-4900 800-494-2218 Rick@KCTrustlaw.com

More information

IRA PLANNING ALTERNATIVES Carl S. Rosen

IRA PLANNING ALTERNATIVES Carl S. Rosen BROAD AND CASSEL ATTORNEYS AT LAW SPRING/SUMMER 1999 BOCA RATON FT. LAUDERDALE MIAMI ORLANDO TALLAHASSEE TAMPA WEST PALM BEACH CHARITABLE LEAD TRUSTS CAN PROVIDE GREAT BENEFITS Kenneth Edelman A Charitable

More information

LIVING TRUSTS AND AVOIDING PROBATE

LIVING TRUSTS AND AVOIDING PROBATE SIUC Legal Clinic 104 Lesar Law Building Southern Illinois University at Carbondale Carbondale, Illinois 62901-6821 618-536-4423 618-536-7723 (FAX) 618-453-8727 LIVING TRUSTS AND AVOIDING PROBATE INTRODUCTION

More information

Gifts of Life Insurance

Gifts of Life Insurance Gifts of Life Insurance Effective Ways to Make Them If you have a desire to make a major contribution to support our good works, life insurance can be an excellent tool for helping you accomplish your

More information

Charitable Tax Planning with Retirement Funds

Charitable Tax Planning with Retirement Funds 1/5 Charitable Tax Planning with Retirement Funds Common uestions and Charitable Solutions Are you putting away something to make sure your retirement is an enjoyable and comfortable one? Most of us are.

More information

The. Estate Planner. The GRAT: A limited time offer? International relations. Avoid probate to keep your estate private

The. Estate Planner. The GRAT: A limited time offer? International relations. Avoid probate to keep your estate private The Estate Planner September/October 2013 The GRAT: A limited time offer? International relations Estate planning for noncitizens Avoid probate to keep your estate private Estate Planning Red Flag You

More information

Retirement Account Gifts: Planning Considerations

Retirement Account Gifts: Planning Considerations Retirement Account Gifts: Planning Considerations Retirement accounts, such as 401(k) plans, 403(b) plans and Individual Retirement Accounts (IRA), are generally viewed as the better assets to leave through

More information

Gift and estate planning: Opportunities abound

Gift and estate planning: Opportunities abound Gift and estate planning: Opportunities abound Vanguard research July 2013 Executive summary. Under federal gift and estate tax rules, individuals can potentially make significant gifts that are exempt

More information

ESTATE PLANNING PROCESS

ESTATE PLANNING PROCESS ESTATE PLANNING PROCESS OVERVIEW Generally, the estate plan consists of 4 documents: a will, revocable trust, healthcare power of attorney, and financial power of attorney. In larger estates (over $10M

More information

HERMENZE & MARCANTONIO LLC ESTATE PLANNING PRIMER FOR MARRIED COUPLES 2015 (New York)

HERMENZE & MARCANTONIO LLC ESTATE PLANNING PRIMER FOR MARRIED COUPLES 2015 (New York) HERMENZE & MARCANTONIO LLC ESTATE PLANNING PRIMER FOR MARRIED COUPLES 2015 (New York) I. Purposes of Estate Planning. II. A. Providing for the distribution and management of your assets after your death.

More information

Reasons to Consider an IRA Trust

Reasons to Consider an IRA Trust Reasons to Consider an IRA Trust Presented by: Michael J. Wittick, Esquire Law Offices of Michael J. Wittick, a P.L.C. 7700 Irvine Center Drive, Suite 800 Irvine, Ca. 92618 Why Retirement Distribution

More information

INDIVIDUAL LIFE INSURANCE A Consumer Resource. Estate Planning. An Introduction to Concepts and Strategies

INDIVIDUAL LIFE INSURANCE A Consumer Resource. Estate Planning. An Introduction to Concepts and Strategies INDIVIDUAL LIFE INSURANCE A Consumer Resource Estate Planning An Introduction to Concepts and Strategies NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY INSURANCE PRODUCTS: MAY LOSE NOT A DEPOSIT

More information

Required Minimum Distributions: What Every Advisor Needs to Know FOR FINANCIAL PROFESSIONAL USE ONLY / NOT FOR PUBLIC VIEWING OR DISTRIBUTION.

Required Minimum Distributions: What Every Advisor Needs to Know FOR FINANCIAL PROFESSIONAL USE ONLY / NOT FOR PUBLIC VIEWING OR DISTRIBUTION. Required Minimum Distributions: What Every Advisor Needs to Know 1 Required Minimum Distributions Upon reaching age 70½, clients must begin taking annual distributions from their IRA in accordance with

More information

GETTING THE MOST OUT OF YOUR LIFE INSURANCE

GETTING THE MOST OUT OF YOUR LIFE INSURANCE GETTING THE MOST OUT OF YOUR LIFE INSURANCE The Irrevocable Life Insurance Trust AMERICAN ACADEMY OF ESTATE PLANNING ATTORNEYS, INC. Getting The Most Out Of Your Life Insurance 1 If you own life insurance,

More information

INHERITANCE & ESTATE PLANNING

INHERITANCE & ESTATE PLANNING Chapter Seven INHERITANCE & ESTATE PLANNING Estate planning is the process of determining how the assets you own at the time of your death your estate will be distributed after your death. The distribution

More information

BENEFICIARY PAYMENT OPTIONS

BENEFICIARY PAYMENT OPTIONS BENEFICIARY PAYMENT OPTIONS FOR ROTH IRAS TABLE OF CONTENTS INTRODUCTION................... Page 2 QUESTIONS AND ANSWERS........ Page 3 PAYMENT OPTIONS............... Page 6 Lump Sum........................

More information