WARNING: DON’T LET CREDITORS INHERIT FROM YOU

Gabriel Katzner - January 21, 2016 - Asset Protection

(This is part 3 in a 3-part series).

Shocking to most people, the retirement account you leave for your spouse can be seized in a divorce, lawsuit, or bankruptcy.

3 Options Available To Surviving Spouses

When your surviving spouse inherits your IRA, he or she generally has three options:

  1. Cash out the inherited IRA and pay the associated income tax.

WARNING: the cashed-out IRA will not have creditor protection and accelerates taxation.

  1. Maintain the IRA as an inherited IRA.

WARNING: the cashed-out IRA will not have creditor protection.

  1. Roll over the inherited IRA and treat it as his or her own.

WARNING: the cashed-out IRA will not have creditor protection.

It’s frustrating to many that a stranger can swoop in and take their hard-earned money; fortunately, there’s a solution and that solution is a standalone retirement trust.

Standalone Retirement Trusts Provide Protection

A Standalone Retirement Trust (SRT) is a special type of revocable trust designed to be the beneficiary of your retirement accounts after you die. It can protect your assets from creditors.  In fact, we can include trust provisions that specifically benefit your spouse in situations such as:

  • Second marriages
  • Divorce
  • Lawsuits from car accidents, malpractice, or tenants
  • Business failure
  • Bankruptcy
  • Medicaid qualification

The bottom line is that a properly drafted SRT is often your best option for protecting your retirement assets (and providing the bonus of tax-deferred growth). Want to know more?  Contact us today to schedule a conversation. We look forward to working with you.

You can schedule a call with us or reach us directly at 855.528.9637 to learn more about how best to plan today to protect those most important to you.

Click below for the other parts in this series:

Part 1:

Caution: Creditors Now Have Easy Access to Inherited IRAs

Part 2:

5 Reasons to Protect Your Retirement Accounts Now

 

Gabriel Katzner

In 2002, Gabriel Katzner, the founding partner of Katzner Law Group received his Juris Doctorate with honors from the Fordham University School of Law. After spending the first 7 years of his legal career
practicing at Cahill Gordon & Reindel LLP, an international law firm based in New York, he went on to found his own firm.

Gabriel Katzner has a track record, along with a vast number of
outstanding public reviews across platforms, of working hard on behalf of individuals who need assistance with comprehensive
estate planning services. Finding a lawyer who is knowledgeable about revocable and irrevocable trust planning, guardianship for minor children, asset protection, trust administration and probate,
as well as Medi-Cal / Medicaid planning is extremely important.

Years of experience: More than 17 years
Location: San Diego, CA



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This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. Furthermore, it has received approval from attorney Gabriel Katzner, an experienced estate planning lawyer with over 17 years of legal expertise.

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