Oct 24

Estate & Tax Planning for Your IRA

What "Uncle Sam" Doesn't Tell You Can Cost You

We have seen many individuals pay money for wills and trusts but fail to include their IRAs into a comprehensive estate plan. This oversight has cost them money in unnecessary taxes and even probate costs.  Our goal is to develop an estate and tax plan for you to minimize taxes and avoid probate costs with the money in your IRA.  Below, please find some common mistakes we have seen with IRAs and a planning point to help you avoid them.

 

  • Mistake: Naming a “spendthrift” person as the beneficiary who immediately withdraws all the monies in the IRA. 
    Planning Point: Name a Trust as your IRA or adopt the restrictions in a Trusteed IRA.

 

  • Mistake: Not stretching out payments of Required Minimum Distributions (RMDs).
    Planning Point: Establish separate shares for each beneficiary to maximize stretch payments of the RMD.

 

  • Mistake: Failing to name a beneficiary resulting in the IRA becoming subject to probate.
    Planning Point: Verify your designated beneficiary on each IRA, and make changes upon life-changing events.

 

  • Mistake: Failure to take the Required Minimum Distributions (RMDs) upon reaching age 70 ½.
    Planning Point: If you have multiple IRAs, contact each IRA Trustee upon reaching age 70 to determine the RMD.

 

For a complimentary analysis on estate and tax planning for your IRA, feel free to contact us to arrange a meeting. It will take less than an hour, and it could disinherit Uncle Sam and probate attorneys — probably a goal most people hold.

 

Securities offered through LPL Financial (LPL), a registered broker/dealer (member FINRA/SIPC). Insurance products offered through LPL or its licensed affiliates. Investment advice offered through Northwest Financial Advisors, a registered investment advisor and separate entity from LPL Financial. Northwest Federal Credit Union is not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Northwest Financial Advisors. These products and services are offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Northwest Federal Credit Union or Northwest Financial Advisors. Securities and insurance offered through LPL or its affiliates are:
Not Insured by NCUA or Any Other Government Agency  /  Not Credit Union Guaranteed  /  Not Credit Union Deposits or Obligations  /  May Lose Value
Northwest Financial Advisors has a strategic partnership with Members Trust Company to provide access to comprehensive professional trust services. Members Trust Company is not affiliated with Northwest Financial Advisors or LPL Financial. You are under no obligation to use the services of Members Trust Company and may choose any qualified professional to provide trust services.
Members Trust Company is a federal thrift regulated by the Office of the Comptroller of the Currency. Trust and investment products are not deposits of or guaranteed by the trust company, a credit union or credit union affiliate, are not insured or guaranteed by the NCUA, FDIC or any other governmental agency and are subject to investment risks, including possible loss of the principal amount invested.
For legal or tax advice, please consult an attorney and/or accountant. A licensed attorney in your state of residence is needed to draw up a trust. A Northwest Financial Advisors or Members Trust Company representative can provide references to qualified and reputable estate planning attorneys. Legal services are not offered or endorsed by Northwest Financial Advisors, Members Trust Company or LPL Financial.

Recent Articles

Apr 25

Next Step Now That Tax Season is Over: Check your Withholdings

Now that tax filing season is over, are you still just a wee bit upset that you didn’t receive a tax refund or owed more than you expected? You’re not alone. After the Tax Cuts and Jobs Act became law in late 2017, tax rates for most individuals were reduced effective with the 2018 tax return filing (currently through 2025). However, it doesn’t appear that way at first glance to many recent taxpayers.

Apr 04

Our Team’s Top Tax Questions

We receive a lot of questions from clients throughout the year pertaining to taxes — which is a good thing since maintaining tax efficiency is an important part of any financial plan. In the interest of serving you well, and proactively, we thought we’d provide answers to the most commonly asked questions we receive about taxes, especially during tax return season. So here we go.