Nearly everyone today has some kind of retirement account. Those who are employed often have 401(k), whereas those who are self-employed tend to have individual retirement accounts. When these accounts are set up, the owner must assign a beneficiary. Although the majority of married people choose their spouse as the beneficial of their retirement account for obvious reasons, this isn’t always a good strategy. A Real Estate Planning Lawyer Las Vegas NV residents trust may be able to help them review their options and choose the right one for their individual situation.
The problem with retirement accounts is that the amount transferred after the original owner’s death is taxable at the beneficiary’s current tax rate. Of course, this is irrelevant for Roth accounts. The rules are different for a 401(k) account and an IRA so it’s essential for everyone who owns these accounts to know what will happen to their money if they die with a balance in their account. Many employer-sponsored accounts require the beneficiary to withdraw all of the money within five years. The rules are more relaxed for IRAs.
A Real Estate Planning Lawyer Las Vegas NV residents turn to for advice on how to handle their retirement accounts might suggest using a trust as the beneficiary instead of a spouse or child. With a properly structured trust, the money in the account may be used by the family over their entire lifetime rather than just a few years. It’s important to work with an experienced firm like Grant Morris Dodds to structure this trust, so the surviving family does not have any unforeseen issues with the funds.
There are a lot of options in estate planning today and people who want to ensure their families are taken care of after they are gone could visit the website to learn more about the tools available to them. Everyone won’t need every planning tool, but it’s helpful to know what is available and to work with an experienced lawyer to choose the right set of options to make the most effective plan for their family’s long-term financial well-being.
