Ohio IRA Planning Services
Individual Retirement Accounts, better known as IRAs, have been around since the 1970s. Available to anyone with earned income, they offer the opportunity to deposit funds in an interest-bearing account, deferring the payment of income tax until withdrawal. IRA planning can be tricky, so let's break it down.
Albert Einstein is reported to have said, “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” Having an IRA allows you to be on the earning side. Being able to defer the payment of taxes on those earnings until you are retired and in a lower tax bracket further increases the benefit of this savings tool, as many people understand.
What few people understand, however, is that an IRA can also be an excellent vehicle for leaving wealth to one’s chosen beneficiaries and allowing it to continue to grow, tax-deferred. IRAs have straightforward rules about when a depositor must start withdrawing funds, and how much must be withdrawn.
At the owner’s death, beneficiaries may continue to take minimum distributions and allow the bulk of the funds to continue to grow, or they may take a lump sum distribution. The vast majority of beneficiaries opt for the lump sum, which is less than ideal. The benefits of tax deferral are lost, and the funds may be depleted or be subject to the beneficiary’s creditors, or division in a divorce.
Most benefactors would prefer the peace of mind of knowing their beneficiaries are provided for well into the future, and that their tax burden will be minimized. The answer is often to create an IRA trust.
IRA Planning to Secure Your Family’s Future
At Gudorf Law Group, LLC, we derive great satisfaction from helping our clients convert their hard work and careful saving into a reliable income stream in retirement, and security for their families into the future.
Our experienced estate-planning attorneys will explore with you your existing IRAs or options for creating an IRA as well as:
- IRA Trust options
- Maximizing accumulation of principal
- Extending tax deferral as long as possible
- Protecting the interests of your intended beneficiaries
IRA trusts are a relatively new and extremely underutilized estate planning tool, but they can yield tremendous benefits.
For more information about this practice area, or to schedule a complimentary consultation with one of our IRA planning attorneys, we invite you to contact us now.
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