Caution: Inherited Retirement Accounts | Lewman Law
 

373 North L Street, Livermore, CA 94551

May 23, 2019

Caution: Creditors Have Easy Access to Inherited Retirement Accounts

inherited retirement accounts, sad face man with empty wallet,

Do you have IRAs or other retirement accounts that you plan to leave to your loved ones?  If so, proceed with caution. Unlike personally owned retirement accounts, inherited retirement accounts do not have asset protection, meaning they can be seized by creditors.

How Can Inherited IRAs Be Protected?  Enter the Standalone Retirement Trust

Fortunately, retirement accounts can be protected- but only if you take action. Many people like you are using Standalone Retirement Trusts (SRT) to protect retirement assets.  The SRT is a special type of trust just for retirement accounts.

A properly drafted SRT:

  • Protects the inherited retirement accounts from creditors, as well as predators and lawsuits
  • Ensures inherited retirement accounts remain in your family and out of the hands of a daughter-in-law or son-in-law or former daughter-in-law or son-in-law;
  • Allows for experienced investment management and oversight of the assets by a professional trustee
  • Prevents the beneficiary from gambling away the inherited retirement account or blowing it all on exotic vacations, expensive jewelry, designer shoes, and fast cars;
  • Enables proper planning for a special needs beneficiary
  • Permits you to name minor beneficiaries, such as grandchildren, without the need for a court-supervised guardianship

meanwhile it also

  • Facilitates generation-skipping transfer tax planning to ensure estate taxes are minimized or even eliminated at each generation of your family.

The Bottom Line on Protecting Inherited IRAs

Although inherited retirement accounts do not have great creditor protection, we are here to help you navigate the best strategy for protecting your retirement accounts. Contact Lewman Law today to protect your inheritance.

Inherited IRAs

Downloadable PDF Diagram-What-Can-Happen-Without-a-Standalone-Retirement-Trust

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