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The Dean Law Firm Blog

Friday, May 15, 2015

Optimizing Retirement Accounts for Your Heirs

Have you ever considered how you might grow your estate so that it can be a gift to not only your children, but also your grandchildren and beyond? Do you anticipate one or all of your children spending their inheritance without much thought? The vast majority of non-spouse heirs to retirement accounts blow a great opportunity to increase wealth by receiving outright distribution of all their inherited retirement accounts shortly after receiving them. With proper planning, your retirement accounts can be one of the greatest legacies you can leave to your heirs.

A Retirement Inheritance Trust is an effective tool to ensure your retirement assets are not squandered that also gives your heirs the gift of continued tax-free growth based upon their own life expectancy, while allowing you to design how those assets are distributed. The ability to maximize income tax deferral and accumulate wealth is one of the greatest advantages of a Retirement Inheritance Trust. Proper planning can allow your heirs to take advantage of the “stretch-out”, allowing your assets to continue to grow tax-free over time rather than being distributed outright and having to pay income taxes right away.

Another major benefit of Retirement Inheritance Trusts is that they provide protection in many scenarios. These important protections include asset protection from creditors, lawsuits and bankruptcy, and divorce protection. Further, properly drafted retirement trusts can ensure protection for minors, as well as the elderly or disabled. If a beneficiary is entitled to government benefits, the trust can be designed to keep them from being disqualified to receive aid.

A Retirement Inheritance Trust is a separate trust that would accompany your Will or Living Trust to specifically address the unique asset of your retirement accounts. Retirement accounts are subject to many particular governmental requirements and the trust must be designed to address them properly to ensure the accumulation of the wealth over time and to increase the impact of your estate’s legacy.




The Dean Law Firm, PLLC assists clients with Estate Planning, Advanced Estate Planning, Planning for Children, Probate/Estate Administration, Elder Law and Civil Appeals in Sugar Land, TX and throughout Houston in Fort Bend County and Harris County.



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