A Better Way to Leave Behind Your IRA

Consider naming a trust as your beneficiary, but watch out for tax issues and RMD complications.

Inherited individual retirement accounts are one of the most complex assets to deal with during estate administration. I learned this firsthand from my recent experience dealing with my father's estate.

As a partner in a wealth management firm, I have significant knowledge and experience in dealing with this issue. Yet even to me, depending on the circumstances of how the deceased named beneficiaries, the administration and set-up of these accounts can seem complicated. Concerns regarding creditor protection versus the benefits of stretching the tax deferral of the IRA for future generations come into play. To complicate matters further, investment firms differ on how they will handle stretch provisions and required minimum distribution (RMD) calculations if a trust is the beneficiary of an IRA, which may be the case when creditor protection is a priority for estate planning.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Robert K. Altshuler, JD CLU CHFC
Partner, Chief Operating Officer, PlanningCore Wealth Advisors LLC

Robert Altshuler, JD, CLU, CHFC, is founding partner of PlanningCore Wealth Advisors, LLC. PlanningCore, a registered investment advisory firm headquartered in Phoenix, Arizona creates individualized investment and estate strategies to help clients navigate risk. PlanningCore clients have already achieved success and our highly credentialed professionals advise them to make smart decisions to protect their core wealth. Every client's financial journey is different, but PlanningCore's mission is always the same, to know and understand the destination.