Want to cut your spouse’s tax cost of inherited IRA’s?

Use Estate Planning to protect your IRAs!

This post speaks to the IRA owner in planning the future, and how essential it is to plan your estate today.  Put bluntly, To get your estate situation the way you want it at death, you need to do your estate planning at the same time you build your asset portfolio.  If you wait until you have built them, estate planning is much more difficult¹.”   

Your IRA may be taxed twice: (1) included the value of the IRA in the estate and it is subject to estate tax, (2) paying income taxes when you receive distributions from the IRA.

The good news… through estate planning you can reduce or postpone these taxes, using the estate tax exemption, which is not just for couples.  (Note: some states still have estate and inheritance taxes you might have to deal with).

Yes, there has been uncertainty (in recent years) about the estate tax exemption, but in early 2013 Congress made the estate tax provision of 2011 and 2012 PERMANENT, so you may be able to avoid federal estate taxes entirely!

To understand the benefits of the recent tax decisions, and how it will affect your IRA and your beneficiaries, you should speak with your tax professional.

¹Bradford Tax Institute – Tax Reduction Letter, July 2013

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RPM & Associates – US-TaxLaws.com – is your best source for tax preparation and financial services management through to and including retirement, wills & trusts and estate planning.