When creating an estate plan, your estate will include a number of components: home, life insurance, bank accounts, investment accounts, secondary properties, and IRAs or other retirement assets. Many people consider their IRA the least of the assets in their estate, because they intend to spend down the IRA before they die, leaving nothing (or almost nothing) to pass on to heirs.
But should you die before that IRA is spent down, it can end up being a significant inheritance over time, provided you-and your heirs-play your cards right.
One of the biggest mistakes you can make is to not designate a beneficiary for your IRA. Depending on the tax laws that govern how IRA assets go through your estate, your heirs could miss the opportunity to save a good deal of money over the course of their lives. With proper planning, beneficiaries can spread out distributions over time to make the most out of their inherited investment.
Of course, every situation is unique, and there may be times when perhaps it will be more beneficial to your purpose to distribute your IRA to your heirs through your trust. Be sure to consult with an Irvine estate planning attorney before making changes that will affect the distribution of any part of your estate.
The Flanigan Law Group provides Southern California residents with personal attention for estate planning, administration and litigation legal services. When disputes between families, arise, they are very successful in resolving legal estate issues quickly and efficiently while preserving financial and emotional resources. Contact the Flanigan Law Group at 949-450-0042.