Families inherit money and sometimes make the right
moves when it comes to investing and spending. Inheritances can also
ignite disruption, divorce, and a host of bad behavior
far from the hopes and plans of the benefactor.
What happens when you leave what’s probably one of
your biggest investments: your individual retirement
Did you know that Individual Retirement Accounts,
including Roth IRAs, are not protected by the federal
government under ERISA, except in the case of
Hopefully, most of us don’t need to worry about such
creditor protection, but still, your estate plan is your
legacy and it needs to be structured to best serve
those you intend to benefit from your assets, including
your retirement money.
Plan for future changes
Perhaps most important, your estate plan must
address potential disruptions: the U.S. tax code will
almost certainly change, your heirs will experience
life’s normal challenges and opportunities and
something you never considered may befall those you
leave behind. Early death, disability, and divorce all
happen every day.
Planning ahead of time is key. What if you leave your
retirement money to your estate instead of to a
person? What if your beneficiary dies before you?
You could use specialized trusts to help mitigate
many risks, such as the danger of a family beneficiary
blowing the inheritance. A number of vehicles exist for
restricting a beneficiary’s (irresponsible) access to the
money. For example, an incentive trust that pays out
only if the beneficiary meets certain conditions and
goals. A spendthrift trust also allows for monthly
allowances or periodic payments for either the life of
the beneficiary or until the funds are gone.
You worked hard to save for your golden years. When
the inevitable day comes and you no longer need
what money remains, make sure you leave it behind
the best way.
Your financial advisor
Ensuring your financial house is in order and planning
for the next generation are complicated issues that
require expert advice.
Find a financial advisor who recognizes the
various benefits of different trust vehicles. Find a
financial advisor who understands how emotions can
interfere with your inheritance plans. Synovus is here to help—give us a call to get started.
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