Individual Retirement Accounts (IRAs) are great tools to save money for retirement and are also a critical part of an individual’s estate plan. As each person and family has a different objective as they reach the golden years, it is a wise step to speak to an experienced estate planning lawyer to make sure it is set up properly and achieves the goals you want in the event of your death. IRAs can be complex, and without proper planning, you and your beneficiaries could face hefty taxes on the monies.
IRAs vary depending on which style you have. Roth IRAs are not tax-deductible and when it is time to withdraw the money at retirement age, taxes will not be taken. Individuals are not forced to take monies out at any age. And with a Roth IRA, your heir can withdraw monies tax-free over their lifetime. A traditional IRA is tax-deductible and withdrawals are subject to income tax. Minimum distributions must start at the age of 70 ½.
Naming your beneficiary is the number one priority, not only when the IRA is set up, but modifying it as necessary when big life events happen. Especially for individuals who want to give monies to a child with special needs, minor children, or other special circumstances, an IRA can designate a trust as a beneficiary. Proper documentation with the assistance of an estate planning attorney will ensure that the monies can go to a child with special needs and still maintain his or her government benefits.
Littman Krooks LLP counsels individuals and families to minimize taxes, probate expenses, and carry out the legacy they want to leave to their beneficiaries. Our New York City, White Plains and Fishkill estate planning attorneys and elder law attorneys are accomplished in asset preservation, trusts, and estate planning. To learn more about New York estate planning, visit http://www.littmankrooks.com/elder-law/estate-planning/.