IRA Legacy Planning

IRA Legacy Planning

Many people have a significant portion of their retirement savings in an individual retirement account [IRA]. The IRA typically allows you to save money for retirement in a tax-friendly way. You will need this money once you retire. But what if you are one of those lucky people with other assets and investments that can finance their lifestyle and bills, so you don’t need that money in an IRA?

The best decision would be to include the money as part of the legacy you intend to leave to your loved ones. If you go this route, you must go through IRA Legacy Planning to plan how you will distribute your hard-earned retirement savings after you pass. This brings us to the question, what is IRA legacy planning, and why is it important? Keep on reading this piece to get answers to these questions and much more.

What is IRA Legacy Planning?

IRA legacy planning is the process of securing and extending the assets in your IRA accounts for your beneficiaries. IRA accounts are becoming one of the largest types of assets inherited by beneficiaries, which can make it important to protect this investment for you and your beneficiaries.

Why you should have an IRA legacy plan

Many people often think there are no major reasons to have an IRA legacy plan. But this is far from being the truth. In fact, having an IRA legacy plan can benefit both you and your beneficiaries in many ways. An IRA legacy plan can potentially protect your assets from any issues with lawsuits, creditors, divorce, or bankruptcy. Some legacy plans might be set up such that your beneficiaries receive a small income from the IRA, potentially preventing them from using it all up and incurring further tax obligations. Slower withdrawals can allow the money in the IRA account to grow tax-deferred, which can potentially result in considerably more money than if the account were just emptied. A legacy plan will guarantee that everything you have devoted your life to preserving is passed on in the manner you, as the earner, see appropriate. In addition, if you don’t have an IRA legacy plan, the state will have to decide how the money in your IRA account is distributed after you pass. The state may not do it in a way that aligns with your wishes. Moreover, your retirement funds may end up going to the internal revenue service [IRS]. That’s why developing an IRA legacy plan is important.

IRA Legacy Trust

An IRA legacy trust is the best way to protect your IRA account and stop significant portions of your retirement funds from going to the internal revenue service [IRS] after your passing. With an IRA legacy trust, you may control what happens to your assets and ensure that it is protected from hefty taxes. The money can only be disbursed in the manner you choose, even if it necessitates giving your beneficiaries all power or imposing various withdrawal restrictions on them. An IRA legacy trust can protect your assets from lawsuits, divorce agreements, bankruptcy, and creditors. Planning your legacy and understanding how to set up an IRA legacy trust to secure your assets will help you leave a better legacy for your future family generations. Stretch it out and protect it now, whether you don’t intend to use your IRA retirement money or have a sizable stockpile of assets there. Also known as a “stretch IRA,” an IRA trust can be created to ensure that the required minimum distributions (RMDs) are taken out gradually over a period of ten years rather than all at once. This preserves the IRA assets not required by the current beneficiaries to benefit future generations. The SECURE Act, a comprehensive retirement law that took effect on January 1, 2020, abolished the “stretch IRA,” which lets non-spousal beneficiaries take funds from inherited accounts over the course of their lifetimes. Since the beginning of 2020, anyone who inherited IRAs has ten years to withdraw the funds however or whenever they like. The exceptions to the rule are recipients with disabilities and spouses.

IRA Legacy Planner

At TruNorth, we have a team of professional Fiduciary Advisors who understands issues to do with retirement and IRA legacy planning. Over the years we have been in operation, we have helped many families invest smartly for and through their retirement. At TruNorth, we can assist you by assessing your financial situation to determine if IRA legacy planning is the best way to ensure that your beneficiaries get a long-lasting inheritance.

Professional Lifetime Income Planners

Are you preserving your IRA for the next generation?

If your living expenses are covered, your IRA plan can become a significant part of the legacy that you leave to your loved ones. TruNorth Advisors can guide you through the most effective ways to pass retirement saving on through IRA legacy planning, ensuring you make the most of your hard-earned funds.

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Frequently Asked Questions

If you are seeking help with your IRA legacy planning, we are here for you. Having an IRA legacy plan allows you to ensure that your IRA transitions to the right beneficiaries. Our team will help you and keep your beneficiaries and information up-to-date throughout the process. A well-structured IRA will give your beneficiaries a regular income stream while leaving the balance for growth. This way, you don’t have to worry because your loved ones will be safe and protected even after your demise.

TruNorth recommends reviewing your beneficiary designations regularly to make sure your assets will be passed on according to your wishes. For some families, strategies like an IRA legacy trust can provide more control over how inherited assets are distributed and help protect them for future generations. Your advisor will work with you to create a legacy plan that fits your goals and your family's unique needs.

TruNorth helps you build an IRA strategy that balances your retirement income needs with the goal of leaving a meaningful legacy for your loved ones. Your advisor will consider factors like tax efficiency, beneficiary planning, and distribution strategies to help your savings work for you today and for future generations. Every plan is tailored to your unique financial goals and family situation.

IRA Legacy Planning

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