Be Proactive; Don’t Let Creditors Inherit from You

This comes as news to most people: the retirement account you leave for your spouse can be seized in a divorce, lawsuit, or bankruptcy.

3 Options Available To Surviving Spouses

When your surviving spouse inherits your IRA, he or she generally has three options:

1.     Cash out the inherited IRA and pay the income tax. 

WARNING! The cashed-out IRA will not have creditor protection and accelerates taxation.

2.     Maintain the IRA as an inherited IRA. 

WARNING! The inherited IRA will not have creditor protection.

3.     Roll over the inherited IRA and treat it as his or her own.

WARNING! This may offer some creditor protection; however, not in all cases.

It’s frustrating to say the least, that a stranger can step in and take their hard earned money; fortunately, there’s a solution and that solution is a retirement trust. 

Standalone Retirement Trusts

A Standalone Retirement Trust (SRT) is a special type of trust designed to be the beneficiary of your retirement accounts after you pass on. It can protect your assets from your beneficiary’s creditors.  In fact, we can include trust provisions which specifically benefit your spouse in situations such as:

●      Second marriages

●      Divorce

●      Lawsuits from car accidents, malpractice, or tenants

●      Business failure

●      Bankruptcy

●      Medicaid qualification 

Want To Know More? 

The bottom line is that a properly drafted SRT is often your best option for protecting your retirement assets (and providing the bonus of tax-deferred growth). Want to know more?  Contact me for a FREE 30 MINUTE CONSULTATION.