What's New
Cook Co. 2007 Homeowner & Senior Exemption Forms are here
Real Estate Blues
Illinois Deed Providers Controversy
How to give IRA to charity tax free
How to Attract a Buyer in a Down Real Estate Market
Wall
St. Journal Article on Inheriting 401ks Why it's important:
Last year, I had a trust administration client whose mother died with
a large 401K plan (more than $800,000.00). The totally unfair tax law
at the time forced the client to pay income tax on the whole thing in
the year of her mother's death. If this new law that allows 401ks to
be "inherited" were in effect, she could have spread the income tax
over many years, saving thousands of dollars.
Client extranet
Last year I started experimenting with setting up a client extranet.
Some services are too expensive and others are too hard to use. (An
extranet is web site that is specific to each client and is password
protected).
Everyone allowed access to the extranet gets notice by e-mail anytime
a message is posted to the site or a file is uploaded. We are now to
the point where it is quick and easy to set up an extranet for any
client. The extranet helps client stay up to date on their
cases.
This
short video shows how the extranet works.
There is no extra charge for establishing a site.
IRA Protection Trust
New type of trust allows "stretch out" of IRA for
heirs, protects IRA from divorce, creditors and mismanagement
The IRS
recently allowed the IRA Protection Trust. Previously, it was
difficult, if not impossible, to leave an IRA account to a trust and
to allow heirs to stretch out payments from the IRA over their life
expectancies. Now, it is possible to do so using the IRA
Protection Trust.
The benefits of the trust are as follows:
1. IRA distributions can be taken over
the life expectancy of each beneficiary. "Stretching out" IRA
distributions allows the IRA funds to continue to accumulate tax free
inside the IRA. The tax-free compounding of the funds inside the IRA
greatly increases the funds available to heirs as compared to taking
all of the funds out of the IRA (and paying taxes on the funds).
2. IRA funds are protected from divorce
and creditors and influence of in-laws.
3. Distributions from IRAs can be "turned
off" and the IRA Protection Trust can be turned into an "accumulation"
trust. This builds in flexibility. If a trust beneficiary became
disabled and was receiving SSI, the trust would not disqualify the
heir from SSI payments (which are needs based).
To read more about the pros and cons of
an IRA Protection trust click
here.
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