Use IRA Trusts To Leave Your Family a Fortune

Did you know that your retirement accounts could very well be
the biggest asset that you leave to your beneficiaries?

Some people think that nothing will be left of their IRA to pass along to their families.  In reality, this is not usually true.  If you take only the minimum required distributions (MRD) from your IRA after you retire, your IRA can actually grow.  This occurs because the investments in your IRA will likely grow faster than the IRS forces you to withdraw money. This is often true until your mid to late 80's, depending on investment performance. 

If you have an IRA worth $100,000 or more, you should consider implementing an IRA Trust as part of your estate plan.  With an IRA Trust, you can pass your IRA along to your children - or better yet, your grandchildren - and put an IRA trust in place to preserve the opportunity to stretch out the distributions over their own lifetimes.  The result? 

Your children or grandchildren will get a check from your IRA with your name on it
every year for the rest of their lives.  How is that for leaving a legacy? 

This is not some kind of magical investment - it is simply the concept of compounded interest over a long period of time.  Here is a typical example:

• Let's assume Bill is 65 years old and has an IRA worth $200,000 today.
• Bill dies at age 85 in 2027.  If his beneficiaries "cash out" the IRA immediately, they will get $253,000 after taxes assuming a conservative 6% growth rate.
• If Bill leaves his IRA to his two children (ages 58 and 55) with an IRA Trust, they will receive $683,000 after taxes over their lifetimes.
• If Bill leaves his IRA to his four grandchildren (ages 36, 33, 25 and 23) with an IRA Trust, they will receive $1,993,000 after taxes over their lifetimes.

An IRA worth $200,000 today turns into almost $2 Million for the grandchildren!

If you already have a Living Trust, that may not be enough to properly protect your IRAs and take advantage of the forced stretchout.  A separate IRA Trust can help you:

• Make sure that your beneficiaries take full advantage of the maximum income tax "stretchout" and allow your IRA to compound income tax-free for generations.
• Pass your IRA from your children to your grandchildren - ESTATE TAX-FREE!
• Protect your loved ones from losing your IRA to a divorce, lawsuit, creditors or government claims.
• Prevent your beneficiaries with poor money management skills from blowing it all!!!