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The Dean Law Firm Blog

Thursday, April 19, 2018

Create Exponential Legacy Wealth Using Your Retirement Accounts

Do you want to leave a legacy that creates compounding wealth for your loved ones?

Your retirement funds can be your legacy-producing secret weapon.  

For many Americans, retirement accounts comprise a substantial portion of their wealth. Yet, few people think about utilizing their retirement assets to provide for generational wealth.  Statistics bear out the sad fact that most beneficiaries see these inherited funds as a windfall and choose to withdraw all your hard-earned money within 18 months of your death, usually at the highest tax rate and blowing one of the best opportunities they have for wealth generation.  However, when properly transferred, your retirement assets can be one of the greatest opportunities for wealth building available under the tax laws.  

There is a way to ensure your loved ones do not blow your lifelong retirement earnings and instead provide a legacy of financial strength for generations to come.

A specialized trust for retirement funds received in inheritance is a tremendous gift to your loved ones.  In what I call a “Retirement Inheritance Trust” (RIT), you can gift your retirement funds upon your death into separate trusts for each of your beneficiaries.  Then, the taxes are deferred over each beneficiary’s own life expectancy according to IRS tables, providing lifelong, compounded tax-deferred growth.  If the inherited retirement funds are from Roth accounts, your loved ones get an even greater benefit as the growth over the beneficiary’s life expectancy is tax-free.

The result?  An exponentially increased potential for family wealth building! 

The RIT turns one of the worst assets to receive through inheritance (because income taxes have not yet been paid on the funds) to one of the best assets (due to its ability to compound tax-deferred or tax-free over the beneficiary’s own life expectancy).   

The RIT also provides very important protections for your loved ones: 1) asset protection, 2) divorce protection, and 3) keeping these funds from being included in his or her estate for estate tax purposes.

Retirement legacy planning is a complex area of law involving inheritance and tax implications.  With the assistance of an experienced estate planning attorney, you can create a legacy beyond your dreams!


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The Dean Law Firm, PLLC assists clients in Sugar Land, TX and throughout Houston in Fort Bend County and Harris County.



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