IRAs

Inherited IRA Issues in North Carolina

Posted on: March 21st, 2017
Inherited IRAs face differing regulation based on whether the beneficiary is a spouse or a non-spouse. Marital status also influences how North Carolina’s intestate succession law applies to an estate, which may pertain to retirement accounts. FINRA released an Investor Alert early this year advising IRA beneficiaries to review inherited IRA tax implications....

Caveat to IRA Contributions

Posted on: September 28th, 2016
Retirement account owners should be aware of a requirement that must be fulfilled in order to contribute to an individual retirement account: compensation income. Annual contribution limits for retirement accounts are common knowledge, but account owners don’t often consider that the ability to contribute is conditional....

Inherited IRA Ruling: Distinctions Between Federal and State Tax Law

Posted on: July 22nd, 2016
Our attorneys strive to share notable rulings and case law to help clients and other advisers understand how a court or officials might respond to a particular set of circumstances. In early June 2016, Private Letter Ruling 201623001 rejected a woman’s request to rollover part of her son’s inherited IRAs....

North Carolina Retirement Concerns

Posted on: May 7th, 2015
Climate, cost of living, and amenities generally affect an individual’s retirement destination choice. North Carolina’s convenient location between major cities like Atlanta and Washington, D.C. make it attractive to seniors who might want to move but stay close to family in metropolitan areas. Financially, North Carolina became even more attractive for retirement in 2012, when...

Inherited IRA Distributions Might Face Changes

Posted on: March 14th, 2015
Inherited Individual Retirement Accounts (IRAs) experienced a see-saw effect with bankruptcy for years. Last year the federal government ruled that IRAs are not protected from federal bankruptcy claims. A year prior in 2013, North Carolina lawmakers passed Senate Bill 279, which protects inherited IRAs from state bankruptcy claims. Complications surface for North Carolina residents owning...

Protecting IRA Assets for Beneficiaries: IRA Beneficiary Trusts

Posted on: October 23rd, 2014
Earlier this year the Supreme Court ruled in Clark v. Rameker that inherited retirement accounts are subject to bankruptcy claims. As a result of this ruling, IRA owners are taking steps to ensure assets accumulated over a lifetime are protected for loved ones. ...

Drawing Too Soon on IRAs

Posted on: June 5th, 2013
Americans between the ages of 61 and 70 are withdrawing money from their IRA accounts earlier than necessary. ...

IRS Allows Rollover of IRA from Estate to Spouse

Posted on: March 21st, 2012
As I tell my clients and audiences during presentations, one should never name one’s estate as beneficiary of an IRA or other retirement account. If the estate is the beneficiary, whether from a purposeful designation, failure to name a beneficiary...

Senator Baucus Proposes Big Changes to IRAs

Posted on: February 9th, 2012
I’ve been a big proponent of planning to preserve the ability to "stretch" inherited IRAs over the life expectancy of the beneficiary, which allows for tremendous tax-deferred growth. In what came as a big surprise,...

Drafting an IRA Trust – What You Need to Know

Posted on: January 27th, 2012
I have previously blogged about IRA Trusts, which are one of my favorite estate planning tools. This afternoon I presented a 90 minute national continuing legal education teleconference and webinar on the topic. I...

How to Draft IRA Trusts – Teleconference

Posted on: December 22nd, 2011
Attorneys interested in learning more about IRA Trusts may wish to sign up for my 90 minute teleconference, How to Draft IRA Trusts, to be held on January 27, 2011 at 2:00 p.m. Eastern. The program may also be of interest to CPAs, financial planners and trust officers....

Bankruptcy Courts Agree – Inherited IRAs Exempt

Posted on: August 30th, 2011
With the Texas case of In re Chilton reversed in U.S. District Court, which held that the debtor’s inherited IRA was exempt from the claims of creditors, all bankruptcy courts that have ruled on the issue have determined that inherited IRAs are exempt in bankruptcy. ...

Separate Accounts for Your IRA Will Help the Beneficiaries

Posted on: May 25th, 2011
The distribution rules for inherited IRAs generally make it advantageous to have separate accounts, which can be done during your lifetime or by December 31 of the year following your death. ...

Texas Court Rules Inherited IRA Protected in Bankruptcy

Posted on: April 1st, 2011
In a ruling entered on March 16, 2011, the U.S. District Court for the Eastern District of Texas, in Chilton v. Moser (2011, DC TX) 2011 WL 938310, reversed the bankruptcy court and held that a debtor’s inherited IRA met the requirements for a bankruptcy exemption under Bankruptcy Code §522(d)(12)....

NC Supreme Court Decision Kinlaw V. Harris IRA Exemption Case

Posted on: April 1st, 2011
I previously blogged about the ruling by the North Carolina Court of Appeals that in addition to IRA accounts being exempt from creditors, distributions from IRAs were also exempt. On appeal, the North Carolina Supreme Court held that “there may be some circumstances under which withdrawn funds are no longer exempt from execution.” ...

Missed Your IRA Rollver Deadline? All May Not be Lost

Posted on: March 27th, 2011
The IRS is often accused of being heartless, but it does show some compassion to taxpayers who cannot complete an IRA rollover within the deadline because of extenuating circumstances. ...

Decision Time is Here if You Did a Roth IRA Conversion in 2010

Posted on: March 22nd, 2011
The rule that made higher-income folks ineligible for Roth IRA conversions expired at the end of 2009. That made 2010 a big year for conversions, because even billionaires could make the transactions. ...

NC Court of Appeals Holds IRA Withdrawals Exempt from Creditors

Posted on: September 16th, 2010
The North Carolina Court of Appeals, in Kinlaw v. Johnson, confirmed statutory law protecting IRAs from creditors, and extended the protection to the account owner’s legal use of IRA funds from collection on a creditor’s judgment. The court stated:...

IRA Experts Keen On Roth Conversions

Posted on: August 21st, 2010
Three of four prominent IRA experts have either already utilized a Roth conversion or plan to do so, and the fourth says he plans to if the market gets even worse....

Inheriting an IRA from a spouse? Make sure you know the rules

Posted on: June 23rd, 2010
When it comes to inheriting an IRA, spouses have more flexibility than other heirs. Here are the basic rules: The surviving spouse may treat the inherited IRA as his or her own, roll it over into an existing IRA, or remain the beneficiary on the account. ...

Inherited IRAs – the continuing saga in bankruptcy

Posted on: March 11th, 2010
I previously blogged about inherited IRAs being subject to the claims of creditors, both in (In Re: Jarboe) and outside of (Robertson v. Deeb) bankruptcy, and one case (In Re: Nessa) where an inherited IRA was determined to be protected under federal law....

IRS Provides Guidance on 2009 RMD Waivers

Posted on: September 25th, 2009
From IR 2009-85: WASHINGTON ― The Internal Revenue Service today provided guidance for retirement plan administrators, plan participants and retirees regarding recent legislation affecting required minimum distributions. ...

Inherited IRAs are Not Creditor Protected – #2

Posted on: September 4th, 2009
I previously blogged about a Bankruptcy Court in Texas holding that an inherited IRA was not exempt from claims of the new owner’s creditors. In re Jarboe, 2007 WL 987314 (Bkrtcy S.D. Tex. 2007)....

Is Your Advisor IRA Savvy?

Posted on: August 11th, 2009
Last week I attended a presentation by Ed Slott, CPA, America’s foremost IRA expert. A couple of years ago I participated in an extensive two-day training with Slott, and found him to be both informative and entertaining. ...

Your IRA may be at Risk

Posted on: July 28th, 2009
In North Carolina standard IRAs are exempt from creditors’ claims, under state law and federal bankruptcy law. Also, qualified retirement plans, such as 401(k)s and 403(b)s, are protected under the federal ERISA law....

Is your IRA heir-tight? Probably not…

Posted on: May 22nd, 2009
The recent Kiplinger.com article How to leave an IRA that’s heir-tight contains lots of good information and advice about IRA distribution planning, but there’s a glaring omission – no discussion of the use of trusts to protect IRAs for the benefit of one’s heirs. ...

Bush Signs Worker, Retiree and Employer Recover Act of 2008

Posted on: December 24th, 2008
This morning President Bush signed H.R. 7327, the “Worker, Retiree and Employer Recovery Act of 2008” (WRERA)....

Should You Roll Your 401(k) Over into an IRA?

Posted on: October 14th, 2008
Once you cease working for an employer, you have the option of rolling over to an Individual Retirement Account (IRA) any retirement plan (such as a 401(k)) established for you while employed....

Bailout Includes IRA Charitable Rollover

Posted on: October 4th, 2008
​The Emergency Economic Stabilization Act of 2008 (H.R. 1424) passed the House yesterday, and was quickly signed by President Bush. ...

IRS to Require Retirement Plans to Offer Non-Spousal Rollovers to IRAs

Posted on: October 27th, 2007
Beginning in 2008, retirement plans (such as 401(ks) must allow non-spouse beneficiaries to roll over to an IRA. The following is from Ed Slott, CPA:...

Watch Out for Vanguard and its IRA Beneficiary Designation Policy

Posted on: October 21st, 2007
Vanguard now requires its customers to have identical benefciary designations for all IRAs of the same type. Click "Continue Reading" for the full article....

Retirement Accounts and Income Taxes vs. Estate Taxes

Posted on: August 29th, 2007
This posting provides a brief explanation of the advantages and disadvantages of funding a Family Trust (aka Bypass or Credit-Shelter Trust, or Trust B) with an IRA or other retirement accounts. ...

Inherited IRA Not Creditor Protected

Posted on: July 20th, 2007
The IRA you inherited from your parents, or that your kids might inherit from you, may not be safe from lawsuits. Jim Roberts, of Glast, Phillips & Murray, P.C. in Dallas, reports on a U.S. Bankruptcy case interpreting Texas law on this issue:...

Why Establish an IRA Trust?

Posted on: June 29th, 2007
In 2005 a Private Letter ruling was issued by the IRA approving a specially designed "IRA Trust" that offers maximum protection and flexibility while allowing the beneficiaries to "stretch" their shares of the IRA over their life expectancies. ...

Everything You Always Wanted to Know about IRAs

Posted on: May 28th, 2007
I know it’s Memorial Day weekend, but being the compulsive tax lawyer that I am, I just finished reading two books by CPA and IRA expert Ed Slott – The Retirement Savings Time Bomb…and How to Defuse It and Parlay Your IRA Into a Family Fortune. ...

IRA Expert Ed Slott Recommends Standalone IRA Trusts

Posted on: April 20th, 2007
I recently attended a two day seminar by nationally recognized IRA expert Ed Slott, CPA. If the protection of a trust for IRA beneficiaries is desired, Slott says that the best way is to have the IRA paid to a Standalone IRA Trust. ...

10 Questions Advisors Must Ask about IRA Custodial Documents

Posted on: April 9th, 2007
More helpful information on IRAs from expert Ed Slott: Financial advisors should make sure they know the following about the IRAs they advise clients about:...

Top 10 Must-Dos for IRAs

Posted on: March 23rd, 2007
It’s vitally important to make sure that the proper beneficiaries are designated for your IRAs and other retirement accounts, since the beneficiary designation controls what happens to the account, regardless of what your will, trust, divorce settlement, or any other agreement says....

Owning Real Estate in an IRA

Posted on: November 19th, 2006
Owning real estate in a self-directed IRA can seem like a great way to save for retirement. However, I have found that most clients want to structure the ownership and/or management of the real estate in such a way that they will run afoul of the prohibited transactions rules. ...