Comments on: How to Protect Your IRA Beneficiary Correctly

By: JoeTaxpayer

JoeTaxpayer — Wed, 10 Mar 2010 01:43:02 +0000

Evan – no. It came to my attention after the fact, the deceased was a friend of a friend. When the gal told me this, I immediately asked how long ago the withdrawal was made. It was past the 60 day period.

I hate finding out after the fact. If the guy was risk averse, I’d have counseled him (on the phone as he was far away) and explained that IRA does not have to equal Stocks. He could have rebalanced to his comfort level, maybe just laddered CDs, and taken those withdrawals as RMDs.
.-= JoeTaxpayer´s last blog ..A Post Season PF Roundup =-.

By: Evan

Evan — Tue, 09 Mar 2010 20:08:56 +0000

That's HORRIBLE JOE! Was the woman a client? Was the brother an eventual client? .-= Evan´s last blog ..Evan By The Numbers March 2010 =-.

By: JoeTaxpayer

JoeTaxpayer — Tue, 09 Mar 2010 19:27:19 +0000

I have a bad story
http://www.joetaxpayer.com/on-my-death-please-take-a-breath/
A woman passes and leaves her IRA to her brother, who is living on just Social Security disability. The IRA value is $160K. He knows nothing about finance, but panics and withdraws all the money. Gets hit with a $40K tax bill. Had he taken withdrawals over his lifetime he may have had almost no tax at all due each year.

By: LeanLifeCoach

LeanLifeCoach — Tue, 09 Mar 2010 03:06:48 +0000

And we wonder why the general public doesn't take care of these things? Honestly, I think I am going to have to pull all that paperwork out again and double check it. .-= LeanLifeCoach´s last blog ..Are You Earning A Living or Living An Earning? =-.

By: Neal@Wealth Pilgrim

Neal@Wealth Pilgrim — Mon, 08 Mar 2010 19:26:20 +0000

Right you are….yes……VERY interesting concept.

By: Evan

Evan — Mon, 08 Mar 2010 16:46:40 +0000

The way I always explain it is:

The trust is a box and inside the box is usually a checking account and the IRA. So you are 100% correct the IRA would have to pay out the RMD but instead of handing the RMD to the beneficiary it would move it into the checking account

Pro: MUCH more control
Con: You are dealing with Trust income rates which are compressed so increased tax.
.-= Evan´s last blog ..Picking Dividend Aristocrat Stocks =-.

By: Neal@Wealth Pilgrim

Neal@Wealth Pilgrim — Mon, 08 Mar 2010 16:42:58 +0000

Hmmm……but the code calls for beneficiary RMD’s…..so how would it work if the Trust prevents the RMD and the law requires it?

By: Evan

Evan — Mon, 08 Mar 2010 15:44:20 +0000

This topic is SO important! Especially in light of the Supreme Court’s recent case, DuPont.

There are two main types, Conduit and Accumulation (they may have different names accross the Country in Cali). So the eventual decedent could even have the choice to prevent ANY rmd going out of the trust until a Trustee allows for it.

Great Post!
.-= Evan´s last blog ..Evan By The Numbers March 2010 =-.