Estate planning with retirement benefits is a challenging area dealing with interface of estate planning and retirement benefits. The paramount concern of many clients revolves around the minimum distribution rules and regulations.

In a major decision, the Supreme Court ruled—Inherited IRA’s are not considered protected retirement funds. This means Inherited IRA’s are now considered fully available assets, subject to creditor’s claims if the beneficiary files for bankruptcy, divorce. If you pass a retirement fund down to a child or grandchild, the inherited money will no longer be protected if your beneficiary must file for bankruptcy or divorce.

Retirement protection

Unlike a spouse, children would not have the option to rolling your retirement plan asset into their own IRA’s. It’s crucial to set up a plan for the beneficiaries to take advantage of continued income tax deferral by establishing inherited IRA’s while balancing the obligations to pay the estate taxes on a timely basis. It is sometimes desirable to name a trust as the beneficiary of an Inherited IRA. This might be because the intended beneficiary is a minor, incapable of managing his or her financial affairs due to drug addiction, alcohol or various other reasons.

This is merely one speck of sand out of the entire desert. Proper trust creation is crucial in order to ensure that your beneficiary—and not his or her creditors—will receive the funds you pass down.

Retirement planning is essential for providing for your future. Because of the constant change in laws, it is important to work with a planning attorney to help achieve your goals.

We invite you to contact us at your earliest convenience to discuss your unique needs and goals.