IRA's can be one of your largest assets. They are the results of your years and years of toil and labor. Because of the trapped taxes within the IRA, they can present problems for your beneficiaries when they are inherited. If the processes of titling and transferring these important assets are not properly handled, a significant portions of your IRAs can be lost to state and federal income taxes. An additional concern about IRAs is protecting them from your beneficiaries’ creditors.
The US Supreme Court will decide this year whether an inherited IRA is protected from a beneficiary's creditors. Given the potential loss of IRA funds to creditors and taxes, it is most important that you be sure that you have planned properly for their distribution. Either a Qualified Living Trust or an IRA Trust can provide significant benefits and protections to your beneficiaries. Tax planning, asset protection planning and estate planning with IRAs require special provisions. If properly handled, the IRAs will provide great benefits to your beneficiaries; if proper provisions are not made, your beneficiaries will lose much of the protection and the financial benefits you wish to leave them.
Contributed by MH Cave Creek, Phoenix and Flagstaff Estate Planning Attorney, B. West Hunsaker.
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At Morris Hall, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.