You got the message. You saved in an IRA so your savings are creditor protected. You saved in your 401(k), 403(b) or Simple IRA plan so you didn’t leave any free employer money on the table. All well and good. Now you have a nice sized retirement nest egg. Now your estate planning just became a little more complicated.
Assume you’ve got a spouse and children, or maybe no spouse and young children, or even a second spouse with children of her own. You want to leave your IRA to your spouse, or current spouse, but you also want to be certain that, upon her death, the remaining assets go the children you want to get them.
Fortunately trust planning for IRAs and other retirement plan assets is still a very useful tool.
Traditionally a revocable trust was used to simply gather and your assets, pay your final expenses and debts, and distribute your assets among your intended heirs. In your situation, you can use it to for distribution control and asset protection of your retirement assets. But, use it with caution as it can result in the unexpected loss of tax-deferred growth and accelerate income tax bills.
When it’s important to control who receives your retirement assets, or how much of your assets someone receives; it's important to plan properly. So, plan now to have a conversation an estate planning attorney to review your personal situation and address your specific planning goals.
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