If you had always intended to leave your IRA or some other retirement account to your family, please be aware of changes in the law and make wise decisions. In the past, IRA’s have enjoyed asset protection. This is no longer true, and your IRA may legally be seized by a creditor.
You must take specific steps if you wish to protect your retirement account and leave it to a beneficiary. A common solution is the Standalone Retirement Trust, also known as an SRT. This is a revocable trust that has been developed specifically for retirement accounts.
An SRT that has been properly written will have several crucial characteristics:
- It will establish a professional trustee for the purposes of investment management and the oversight of the trust assets.
- It will provide for appropriate planning for a beneficiary with special needs.
- It will allow for a minor beneficiary to be named without a court-supervised guardianship.
- It will keep the inherited retirement account within your bloodline and out of the reach of relatives by marriage.
- It will keep the beneficiary from blowing the whole retirement account on wasteful expenses such as gambling, exotic vacations, expensive jewelry, etc.
- It will protect the inherited account from creditors, lawsuits, and predators.
- It will enable the beneficiaries to minimize or even eliminate estate taxes.
Ultimately, the United States Supreme Court made it an uncertain move to leave IRA’s or other retirement accounts to your beneficiaries. We can help you know whether an SRT will work in your situation and help you protect your inherited retirement account. Give us a call today and set up an appointment.