08 Feb Reason#6 to Update Your Estate Plan: Your IRAs are not Protected

Over 25 years ago, Phelps LaClair founder Stephen Phelps decided that he would take advantage of the warm Arizona climate and try his hand at planting citrus trees. Well, try he did, and he soon had 30 citrus trees in his backyard! That may seem like an awful lot of citrus for just one family, but with ten children who were starting to grow up and have children of their own, he knew that sometime down the road it would all be put to good use.

While it’s not too often that temperatures go below freezing in the Arizona desert, it does happen. So during the winter months, Stephen would listen carefully to weather reports, waiting for a freeze warning. On those cold winter nights he could often be seen with a wheelbarrow full of burlap coverings walking from one tree to the next, carefully protecting the young plants. Flash forward several years, and those same citrus trees are now flourishing and providing fruit for a posterity of over 70 people!

You may or may not have citrus trees, but you probably do have something that you started years ago with the hope of reaping its benefits in later years: your IRAs.

 #5 reason to update your estate plan this year: Your IRAs are unprotected

If you plan it right, not only will you be able to retire comfortably with the money set aside in your IRAs, your kids and grandkids will too. However, just like Stephen’s citrus trees, your investments must be properly covered. If you want these funds to continue to be tax-deferred after you die, they must be protected in an IRA Inheritance Trust. Our team of experienced tax attorneys who understand the complex IRS distribution rules is uniquely equipped to offer this ground-breaking trust.

Think of it as a revocable trust set up separately from your Living Trust. The IRA Inheritance Trust is named the primary or secondary beneficiary of your IRA (or company retirement plan), but you remain the owner in full control during your lifetime. You can also make changes to the trust during your lifetime. When you pass away, your IRA distributions pour over into the IRA Inheritance Trust. The trust can then help assure the maximum tax “stretch-out” and better protect your spouse, children, and grandchildren from the influence and claims of spouses, caretakers, unwanted third parties, lawsuits and creditors!

Stephen and his children, grandchildren, and even great-grandchildren are now enjoying, quite literally, the fruits of his labors of nearly three decades ago. With a little vision and planning, you and your posterity will be reaping the benefits of your labors for years to come. Call us today to schedule a free consultation and get started on your IRA Inheritance Trust.