Estate Planning

IRA Beneficiaries - Know the Rules

By David M. Goldman

As Baby boomers retire and move to Florida or other states, one of the jobs of an Estate Planning Lawyer is to review the Beneficiaries on IRA and other types of accounts. Denice Glerach a lawyer in Naperville wrote an article discussing this problem and suggesting some solutions for IRA's suggesting that most people do not realize that the money in a traditional IRA account or employee benefit accounts are subject to income taxes by the recipient as well as estate taxes upon the death of the IRA owner.

Several options are mentioned
Leaving the IRA to a charity - Should eliminate the income tax and estate tax.
Leaving the account to a trust to defer income tax and protect it from creditors.
Structuring the trust correctly to reduce or defer income taxes by spreading the distributions.
Using a Conduit trust or an accumulation trust as the designated beneficiary to qualify as a designated beneficiary to help protect the assets. and
Not missing real people with charities was beneficiaries because charities are not considered to have a life expectancy.

You review the beneficiaries on your estate planning documents and all accounts on a regular basis.

Full post as published by Florida Estate Planning Lawyer Blog on January 23, 2008 (boomark / email).