IRA Inheritance Trust

Will your family lose MILLIONS because you don’t have an “IRA Inheritance Trust”?

Without it, your IRA’s may become big, fat targets for the IRS and your beneficiaries’ spouses, divorces, lawsuits & creditors!

If your IRAs (including any amounts you may roll over from a 401(k) or other employer retirement plan) total over $200,000, you need to read on… because what you don’t know may cost your family millions!

Thanks to new IRS rules, your beneficiaries (who receive your IRAs after you’re gone) may now “stretchout” their taxable, required minimum distributions over their own life expectancies. This means your IRA monies may compound income-tax free for a much longer period — and literally grow to be worth millions!

For example, let’s say your IRAs total $200,000 at your death and your child (or other beneficiary) is age 50 when he or she inherits them. If we assume that the accounts grow at 8% per year, and your child only takes out the required minimum distributions, just look at these incredible numbers…

  • At age 80, your child will have already received about $700,000 of distributions and still have remaining in your IRAs almost $300,000 (which may continue to grow tax-free and be passed on to your grandchildren)! In other words…
  • As the result of the new IRS “stretchout” rules, your IRAs may well be worth, over time, in excess of $1 Million and may become the largest assets you pass on to your loved ones!

The problem is, this income tax “stretchout” is not automatic.

  • You have to do proper advance planning.
  • Your IRA must have the right beneficiaries — And chances are the ones you now have are wrong!
  • You can simply name your children or other individuals as beneficiaries of your IRAs, but that may be a terrible disaster! Why? Because individuals may unintentionally blow the income tax “stretch-out”, and potentially cost your family millions!

This may happen because your beneficiaries are not aware of the tax rules and their distribution choices. Or a beneficiary, influenced by his or her spouse or some other unscrupulous third party, may just decide to withdraw your lifetime’s savings to foolishly spend or poorly invest it!

And even if we assume that your beneficiaries do the right thing and maximize the income tax “stretchout” of your IRAs, your life’s savings may still be seriously exposed to these threats:

  • The IRS grabbing Estate Taxes of up to 35% (2011). (This may happen even if you’re married, have under a $10 Million estate (2011), and set up an “A-B” Living Trust! And whether you’re married or not, your IRAs may be walloped by estate taxes when your child passes
  • Your beneficiary’s spouse may snatch half of your inherited IRA in a Divorce! (Keep in mind that the divorce rate in California is over 50%! And also realize that this spouse could be a fortune hunter you don’t currently know, who later marries your beneficiary after you’re gone!)
  • Your beneficiaries may blow it all due to their Poor Money Management (Particularly if some of your IRA monies eventually pass down to grandchildren or others who are young or financially inexperienced or a sprendthrift!)
  • Your beneficiaries’ Creditors and Lawsuits may grab all of your Inherited IRAs!

Naming your Living Trust as the beneficiary of your IRAs won’t work to minimize all of these problems and qualify for the maximum “stretch-out” of income taxes.

You may need an IRA Inheritance Trust™ in addition to your Living Trust!

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