Successful estate planning generally involves passing on your assets to your heirs at a low tax cost. To help achieve that goal, there are a few things to keep in mind about retirement accounts.
Continue Reading...When Trusts Meet Retirement Accounts, a recent article on WSJ.com, explains the benefits of using a trust to pass on IRAs and other retirement accounts to children. Properly drafted trusts can provide protection against losing or depleting the funds due to mismanagement, creditors, and divorce. What's more, since the accounts can then be "stretched" over the beneficiaries' lifetimes, the effect of tax-deferred compounding on the account values is simply astounding.
Due to the complexities in this area of the law, working with an attorney experienced in drafting such trusts and well-versed in applicable law is imperative.
I regularly recommend Standalone Retirement Plan Trusts to clients who have $200,000 or more in retirement savings and want to ensure that the funds will be protected after their deaths.
Here's a great, to the point article on what NOT to do to ensure you have sufficient retirement savings - from the National Center for Policy Analysis.
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