(612) 206-3701 info@lucerelegal.com

A Trusteed IRA Will Keep Providing for Generations to Come

Lucere Legal helps families with trusteed IRA planning
Categories: Estate Planning

Are you among the growing thousands of Americans leveraging the power of an IRA to save for the future? The last ten years have seen a tremendous increase in both the number of Americans starting IRAs and the amount of money invested in traditional and Roth IRAs on the whole–some $6.5 trillion!

This is undeniably good news as many financial planners consider IRAs to be perhaps the perfect balance of risk and reward for those looking toward retirement. However, the increasing prevalence of IRA use has had some unintended consequences when it comes to estate planning. Recent studies have shown just how little IRAs are taken into account during estate planning, with only a small portion of these assets to ever reach future generations.

You want to make sure that your descendants are provided for after you are gone, so make sure you take the time to ask an estate planning attorney about establishing a trusteed IRA.

A trusteed IRA combines the financial strength of a traditional IRA with many of the same estate planning protections offered by a trust. Moreover, their design can be such that the assets can provide for the long-term, reaching down through multiple generations of beneficiaries. Despite requiring a greater initial expense to administer than a traditional IRA, a trusteed IRA is typically less costly than a non-IRA trust and offers near-limitless options for it to be tailored to your individual wishes.

A trusteed IRA affords you the same control as a standard trust, ensuring that your primary beneficiaries are not simply handed a lump sum of cash to do with what they wish. Instead, you can direct the distributions to grandchildren and great grandchildren, or even impose conditions on the availability of portions of the assets.

Research into the fate of traditional IRAs show that the majority of primary beneficiaries will deplete the account entirely within just two years. This often takes the form of melding the IRA assets into their own, but can entirely wasted by a particularly spendthrift inheritor. A trusteed IRA lets you set the boundaries. One popular example: allow no more than the IRS’s minimum required distribution to pass to your heirs each year to see your investment over many generations–even accruing interest along the way!

This tool can be invaluable for a blended family. Your children and your children’s children are those you seek to provide for, not any new family of your surviving spouse. The trusteed IRA again proves its value in the unfortunate event that you become incapacitated–the trustee assumes control over the investments and distribution on your behalf, with no need of appointing a guardian in the interim.

If you would like to learn more about the benefits of a trusteed IRA, call our office today at 612-206-3701 or reach out via our online contact form to schedule a time for us to sit down and talk about it in a family estate planning consultation, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

Image Courtesy of photostock | FreeDigitalPhotos.net

Contact us to see how we can help you with Estate Planning

You may also like . . .

The Risks of Poor Man’s Estate Planning: 10 Common Mistakes

With my years of experience as an attorney, I have seen plenty of families left to sort things out for themselves because their parents either failed to plan their estate or turned to the siren song of the new, “do-it-yourself” estate planning websites in a misguided...

It’s Time You Got an Agent

You need an agent. No matter the nature of your unique talent and whether or not you have a particularly telegenic personality, your agent will be there to protect your interests and desires even after you’ve passed. What, did you think I meant the Hollywood type?...

The Tragic Family Fight Over the Property of Funnyman Robin Williams

The passing of beloved comedian Robin Williams shocked the world, but the latest tragedy that has followed in its wake was all too predictable. Mr. Williams left behind three children from two different marriages, Zak, Zelda, and Cody, from his first two marriages and...

The plain-English guide for Minnesota small business owners

When it comes to business, ignorance isn't bliss; ignorance is risk.

There's a handful of legal topics that business owners should be familiar with, at least on a rudimentary level, to reduce the risk of having something horrible come out of left field.

This book is a legal guide to help you put the most common business legal issues on your radar, with enough information for you to be on the alert for when you may need to get some professional advice.

The intention in arming you with this information is so that you can proceed in business confidently and with fewer legal quagmires.

Do you have a cabin?

The first generation that buys a cabin enjoys it to the fullest and it’s a magical place where happy memories are made and families go for some much needed respite. Unfortunately, without thoughtful planning, the chances of the cabin staying a place of happiness and tranquility into successive generations is very, very slim.

If you haven’t done the planning in advance and made it legally binding, the family members (and their ex-spouses and new spouses) will have to work every detail out for themselves. If they can’t, what is likely to happen is a lawsuit called an action for partition that forces everyone to sell their interest. This lawsuit is expensive, and the costs of litigation will come out of the proceeds of the sale of the cabin, so to add insult to injury to those who wanted to keep the cabin but couldn’t afford to buy the others out, they are footing part of the legal bills in the lawsuit against them. Ouch!

It’s no wonder that family members stop speaking for years after the cabin conflict is “resolved.” You can’t make family relationships perfect, but you can take away much of the fuel for the family conflict fire. That’s what cabin planning does, and it has the nice side effect of giving you peace of mind now.

That’s why Kimberly wrote The Minnesota Cabin Planning Guide and Workbook, and you can get a free electronic copy of her book on our cabin planning website, or you can find it in many county libraries in Minnesota, or you can get it on amazon.com.

Make An Appointment>

Join Our Mailing List

Subscribe to our newsletter list to get information and resources helpful to running your business and planning and managing your personal financial affairs delivered right to your inbox.

We don’t spam and won’t share your information with anyone, at anytime, ever.

Check out our podcast

The Small Business Buzz Podcast