IRAs and Retirement Plans are quirky. Planning for them
involves Federal income tax law, Federal estate tax law,
Federal ERISA law, and Florida asset protection law and
inheritance law. Let Bailey Zobel Pilcher help you design a
stand-alone revocable trust, funded at your death with your
retirement assets, to maximize the benefits under all of
these sometimes conflicting laws. Compared to your regular
revocable living trust, the IRA inheritance trust is more of
a race car than a minivan. It only fits your retirement plan
assets-it does not comfortably fit you, your loved ones,
your assets, your pets, and your baggage-but it does fit
your retirement plan assets very, very well.
Most often, people who inherit retirement plans cash the
plan out, pay income tax on the funds received, and buy a
car or a kitchen or a pool with the remaining funds. You can
avoid this frittering of your wealth.
The IRA inheritance trust creates separate sub-trusts for
each of your loved ones, allowing for "stretch-out" under
IRS rules. Your beneficiary designation form names the
sub-trusts of your IRA inheritance trust as the beneficiary
of your retirement plan. Each sub-trust is counted as a
designated beneficiary, so each individual beneficiary's
life expectancy determines the required minimum
distributions. The assets remaining in trust continue to be
considered IRA assets by the IRS. This means that earnings
grow tax deferred-income tax is paid only when the funds are
withdrawn. The trust terms-written by you-dictate the
distribution of funds to beneficiaries, offering control to
you and asset protection to your loved ones. Our
professional attorneys will counsel you to determine if this
trust is right for you. |
