IRAs

4 Signs That Assets are at Risk to Lawsuits in NC

Posted on: May 3rd, 2017
North Carolina is often referred to as a debtor-friendly state due to the many statutory creditor protections state law provides. However, even with these protections there are individuals and businesses who may not structure assets properly to take advantage of available protections....

3 Tax Benefits the 50+ Crowd Enjoys

Posted on: August 10th, 2016
Although many tax regulations fluctuate based on the taxpayer’s adjusted gross income, some tax provisions are instead based on the taxpayer’s age. Knowing when an individual will enjoy certain tax benefits can help to guide tax planning. North Carolina taxpayers aged 50 and older enjoy several tax advantages....

Last-Minute Year-End Tax Deduction: IRA Charitable Rollover

Posted on: December 29th, 2015
If you plan to use the IRA Charitable Rollover provision for the 2015 tax year--make arrangements before year's end!...

3 Mistakes Parents Make in Estate Plans

Posted on: September 25th, 2015
For many remarried individuals, estate planning decisions must take into account not only one’s biological children, but also step-children, future children, or a new spouse. In revising estate plans to incorporate these considerations, parents might utilize planning methods that unintentionally expose family to risks....

Covering Retirement v. Leaving Inheritance

Posted on: May 27th, 2015
Expenses in senior years continue to be a concern for many Americans. As multiple studies show, most individuals do not maintain adequate retirement contributions. ...

Invest or Gift This Year’s Tax Refunds?

Posted on: March 16th, 2015
During tax season, filers try to maximize their deductions. Proper tax planning helps minimize tax due, and could result in a sizable refund. Taxpayers who receive refunds can spend them however they choose, but what strategy offers the most benefits? Tax refunds might be spent frivolously or sensibly. Using the money toward a vacation could ...

How Asset Protection is Different in 2015

Posted on: January 19th, 2015
Wealth preservation is an ongoing process. How, when, and where assets are transferred or acquired affect protections. As the New Year begins, individuals can take a step back and review legislation changes that affect our year ahead and those to come:...

3 Signs You Should Update Your Retirement Plan

Posted on: December 18th, 2014
Reports continue to show Americans are not saving enough for retirement. Some retirement account owners may miss out on opportunities that could help grow their assets, even if they are not contributing suggested amounts. ...

When Beneficiary Designations are Void

Posted on: July 23rd, 2014
As a general rule, beneficiary designations supersede instructions for transferring assets that may appear in a Will. This is one of the reasons why regular reviews of one’s estate plan are critical. ...

Debt Inheritance: Credit Cards, Tax, and Other Liabilities

Posted on: July 14th, 2014
An individual may accumulate assets during his or her lifetime, but debt may reduce or eliminate an inheritance family members expected to receive. Loved ones may “inherit” debt if a decedent lacked effective estate planning, beneficiary designation updates, and asset protection....

IRA Rollover Annual Limit Changes Effective 2015

Posted on: April 25th, 2014
The recent Tax Court ruling of Bobrow v. Commissioner set a precedent for owners of multiple Individual Retirement Accounts: Multiple IRA rollovers may not occur annually. ...

Retirement Plans in Same-Sex Marriage

Posted on: April 23rd, 2014
Some retirement benefits only apply to spouses in a legal marriage. Since legal marriages are not recognized in every jurisdiction and theWindsor ruling granted federal recognition of same-sex marriages, how should retirement benefits be handled?...

5 Proposed Rules for Retirement Accounts

Posted on: April 22nd, 2014
Our tax attorneys covered several pending federal revisions in our Tax Changes for 2015, one of which affects retirement accounts. ...

IRA Custodian Not Responsible for RMDs

Posted on: April 15th, 2014
Failing to take a Required Minimum Distribution (RMD) results in a penalty for the account owner. IRA account custodians are only responsible for notifying owners of their RMD; the owner must take the steps necessary to draw a distribution....

What Happened to the Estate Tax Exclusion Portability Deadline?

Posted on: February 5th, 2014
Estates who have not yet filed a federal estate tax return (IRS Form 706) electing portability now have a new deadline to file election of portability. ...

3 Things When You Inherit an IRA

Posted on: January 29th, 2014
Last year North Carolina passed legislation that provides added creditor protection for Individual Retirement Accounts (IRAs). ...

Mistakes in Beneficiary Designations

Posted on: January 3rd, 2014
Beneficiary designations are an important tool in estate planning – one must always remember that their terms trump the distributions provided in a decedent’s Will. Retirement accounts, life insurance, and other assets offer owners the power to entitle individuals to these assets upon the owner’s death. Errors could cost a surviving family member their expected share of a loved one’s estate, pass assets to an unintended party, incite family conflict, or cause unnecessary tax burdens for beneficiaries....

3 Concerns for Minors Inheriting IRAs

Posted on: November 7th, 2013
Beneficiary designations for Individual Retirement Accounts (IRAs) allow account holders to designate a trust, charity, or any individual, regardless of their age, as a beneficiary. ...

Retirement Accounts Vulnerable to Back Taxes

Posted on: October 24th, 2013
Tax shelter for long-term savings is one of the features that attract people to Individual Retirement Accounts (IRAs). Once certain age requirements are met, distributions from IRAs are penalty-free, and Roth IRA distributions are tax-free—as opposed to taxable Traditional IRA distributions, since contributions to these retirement accounts are made with pre-tax dollars. ...

Creditor Protection for Inherited IRAs

Posted on: September 29th, 2013
In June 2013, North Carolina’s Governor signed Senate Bill 279 into law, which made changes to statutes related to estates, trusts, and guardianships. One change provides additional creditor protection on retirement accounts in North Carolina....

What if Stretch IRAs are Lost?

Posted on: August 6th, 2013
Stretch IRAs have been a popular tool for preserving wealth for future generations as distributions are tax-deferred. However, the Obama Administration has proposed disallowing stretch IRAs....

Preparing for Early Retirement

Posted on: July 23rd, 2013
Those who plan an early retirement need to take steps to preserve their assets in the face of shrinking resources and ever-increasing costs. ...

3 Steps to a Better Retirement Plan

Posted on: June 26th, 2013
What is your ideal retirement? Everyone takes their own strategy toward retirement, but generally individuals try to create a retirement plan that will provide enough money to care for themselves while affording them the means to do the things they enjoy. ...

Estate Planning for Unmarried Couples in North Carolina

Posted on: June 11th, 2013
There are thousands of couples living together in North Carolina who are not married. Relationships may be just a year old or spanning a few decades....

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. ...

3 Reasons Why You Need IRA Beneficiary Trusts

Posted on: May 27th, 2013
Naming a trust as an IRA beneficiary has become a popular estate planning tool in recent years.* There are many advantages to using an IRA Trust: ...

What Happens if Your Beneficiary Dies Before You Do?

Posted on: May 22nd, 2013
As you prepare your Will and estate plan, you will choose beneficiaries to receive your financial and personal assets. What happens if a beneficiary dies before you do?...

Retirement Savings Change Based on Income Projections

Posted on: May 17th, 2013
The Boston College Center for Retirement Research released a study that involved over 15,000 employees who were offered projections of their retirement income based on potential voluntary contributions. ...

Distribution Advantages for Spouse IRA Beneficiaries

Posted on: May 5th, 2013
Designating a spouse as a beneficiary of an IRA not only ensures they will have access to retirement accounts in the event their partner passes away, but it offers them unique advantages to which non-spouse beneficiaries are not entitled....

Why You Should Update Your Beneficiaries

Posted on: April 24th, 2013
Neglecting to update beneficiaries, or failing to name them, may leave life insurance and retirement accounts to unintended recipients, create probate expenses, and cause tax problems. ...

$3M Limit on IRAs in Obama’s Proposal

Posted on: April 15th, 2013
Individual Retirement Accounts are a top retirement choice for individuals who want to enjoy tax-deferred savings. However, Obama’s new budget plan includes caps on IRA accounts. ...

Traditional IRAs: 3 Penalty-Free Withdrawals are Allowed Before Retirement

Posted on: March 4th, 2013
Traditional Individual Retirement Accounts (IRAs) may receive annual contributions up to $5,000 (as of 2013), and individuals over the age of 50 may contribute an additional $1,000. ...

More Estate Planning Opportunities Forecasted for Roth 401(k)s

Posted on: March 1st, 2013
A new study reveals more employers will offer Roth 401(k)s to their employees in 2013. About a third of all employers surveyed by Aon, a human resource services provider, have plans to add a Roth contribution option. ...

What the Fiscal Cliff Deal Means for Retirement Accounts

Posted on: January 13th, 2013
The fiscal cliff deal has not only affected income and estate taxes, but it has also changed how retirement rollovers are handled....

How to Determine Date of Death Values

Posted on: November 20th, 2012
When administering an estate, determining the date of death values of the decedent’s assets is essential. Filing federal and state estate tax returns and paying any taxes due can only be done when the value of all the decedent’s property is known. ...

Don’t Let Them Boss You Around!

Posted on: September 17th, 2012
Dealing with financial institutions is not always easy; nor are the institutions always in the right. This is a big frustration in practicing estate planning and probate law....

Self-Directed IRAs – Exercise Caution

Posted on: July 14th, 2012
A self-directed IRA is an IRA held by a custodian that allows investments in a broader class of assets than allowed by most IRA custodians, such as real estate, promissory notes and private placement securities....

Keep Track of IRS Rules on IRAs and Other Retirement Accounts

Posted on: June 26th, 2012
Owners of individual retirement accounts might face increased scrutiny by the IRS in the near future, posing the danger of hefty penalties for account mistakes that have previously gone unnoticed....

Another Flip-Flop on Inherited IRA Stretch

Posted on: March 10th, 2012
Tax season is in full swing, and I was recently out of the office for a few days, so I’m a bit late in reporting this, but the provision to do away with the ability of most IRA beneficiary’s to stretch distributions over their life expectancies is now back on the table as part of the Senate Highway Bill. See Page 28 for details....

Stretch IRAs No Longer on the Chopping Block

Posted on: February 23rd, 2012
The the provision that would limit stretch IRAs (I blogged about it yesterday) has been removed from the proposed Highway Bill. Good news! See this article on AdvisorOne.com ...

No More IRA Stretching?

Posted on: February 22nd, 2012
Senator Baucus’ proposal to do away with stretching for most inherited IRA has not gone away as was anticipated earlier this month. A recently introduced Senate bill, S. 1813, the Highway Investment, Job Creation, and Economic Growth Act, ...

12 Scary Beneficiary Designation Mistakes

Posted on: October 31st, 2011
It’s Halloween, and tonight kids of all ages will be dressed in an assortment of costumes, many designed to frighten. What frightens an estate planner? Here are a dozen examples of scary planning (or lack thereof) with regard to life insurance and retirement plan beneficiaries:...

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. ...

RA Charitable Rollover is Back

Posted on: January 23rd, 2011
There’s good news if you’ve reached age 70 1/2, and you have an IRA and philanthropic inclinations. Through 2011, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 resurrected the opportunity to make cash donations to IRS-approved charities directly out of your IRA....

Don’t Pay more than 24.5% Tax on Your Roth Conversion

Posted on: January 13th, 2011
Do you think you have to pay income tax on large ($500k++) Roth IRA conversions at the top marginal tax rates? Think again. I have recommend the following strategy to several of my clients. In most cases, you can stay with your current investment manager....

Operation of Law: Coordinate your Will and Property Ownership, etc.

Posted on: December 28th, 2010
You know the importance of having a will. If you die "intestate" (without a will in legal language), your state’s laws will determine the disposition of your assets....

Roth IRAs offer Tax and Estate Planning Advantages

Posted on: August 4th, 2010
Roth IRAs are a great tax saving vehicle. The reason: Investments held in a Roth IRA are allowed to build up federal-income-tax-free. Later on, you can take federal-income-tax-free withdrawals. Obviously, a zero tax rate is the best rate going....

What Will Happen to Your Retirement Accounts After You Are Gone?

Posted on: August 2nd, 2010
When Trusts Meet Retirement Accounts, a recent article on WSJ.com, explains the benefits of using a trust to pass on IRAs and other retirement accounts to children. ...

How about an estate tax-free IRA?

Posted on: June 3rd, 2010
With the federal estate tax returning next year at a rate of 55%, with only a $1 million exemption, planning to reduce estate tax should be on the forefront of the minds of those fortunate enough to have assets in excess of that amount....

Roth Conversions – Just Because You Can Doesn’t Mean You Should

Posted on: December 29th, 2009
Some financial advisors are warning against a Rush to Roth. The key to is to approach the idea cautiously and do a comprehensive analysis. ...

8 Reasons to Convert to a Roth IRA

Posted on: December 11th, 2009
As most people know by now, the $100,000 income limit on the ability to convert a traditional IRA to a tax-free Roth IRA will disappear next year. ...

The IRS Loves Retirement Accounts

Posted on: November 19th, 2009
Planning for tax-qualified plans, which includes IRAs, 401(k)s and qualified retirement plans, requires a careful examination of the potential taxes that impact these assets. Unlike most other assets that receive a “basis step up” to current fair market value upon the owner’s death, IRAs, 401(k)s and other qualified retirement plans do not step-up to the date-of-death value....

U.S. Tax Court – Single Member LLCs Not Disregarded for Gift Tax Purposes

Posted on: August 26th, 2009
Unlike in the income tax and asset protection arena, single member limited liability companies (LLCs) are not disregarded for gift tax purposes. Pierre v. Commissioner, 133 T.C. No. 2 (Aug. 24, 2009). See Paul Caron’s recent TaxProf Blog entry for a brief summary....

Assignment of IRA by Estate to Charity is Not a Transfer

Posted on: July 8th, 2009
These are the facts from a recent Private Letter Ruling from the IRS: The Decedent had a "pour-over" will requiring that his probate estate be added to his living trust. ...

U.S. Tax Court Rules on Exceptions to IRA Early Distribution Penalty

Posted on: May 20th, 2009
The United States Tax Court, in Benz v. Commissioner, 132 TC No 15, recently ruled that a taxpayer taking a series of equal periodic payments as an exception to the 10% early distribution penalty for IRA withdrawals could also take advantage the early distribution penalty exception for payment of higher education expenses without the education payment being considered a modification of the series of equal payments. ...

Public Good IRA Rollover Act of 2009

Posted on: April 25th, 2009
This bill was recently introduced in the U.S. House of Representatives, and is for the expansion of IRA charitable rollovers, which are currently limited to those who have reached 70 1/2, may be no more than $100,000, and must go to a 501(c)(3) organization. ...

Obama’s Budget Proposal – Automatic IRAs

Posted on: April 10th, 2009
From my CPA colleagues at Virchow, Krause & Company – a summary of the proposals to help expand retirement savings....

10 Ways to Wreck Your Retirement

Posted on: March 30th, 2009
Here’s a great, to the point article on what NOT to do to ensure you have sufficient retirement savings – from the National Center for Policy Analysis....

Top 10 Facts About Taking Early Retirement Plan Distributions

Posted on: February 24th, 2009
From the IRS: If you took an early distribution from your retirement plan, here are some things you need to know:...

Teitell Urges More Favorable IRA Charitable Gift Rules

Posted on: January 12th, 2009
Conrad Teitell, one of the nation’s most foremost charitable gift planning attorneys, has, on behalf of the American Council on Gift Annuities and the National Council on Planned Giving, written Congress urging changes to IRA distribution laws:...

Finance Charity-Owned Life Insurance with your IRA

Posted on: January 5th, 2009
In a private Letter Ruling issued late in 2007, the IRS approved a clever technique to leverage a gift to your favorite charity using your IRA and life insurance. ...

Required Minimum Distributions to be Suspended?

Posted on: December 12th, 2008
This update is courtesy of Barry C. Picker, CPA: It looks as if Congress has passed, and sent to Pres. Bush, H.R. 7327; Worker, Retiree, and Employer Recovery Act of 2008, ...

Update Your Beneficiary Designations

Posted on: October 28th, 2008
Failure to update one’s beneficiary designations for life insurance, annuities and retirement accounts is all too common. ...

House and Senate Bills have same IRA Charitable Rollover Provision

Posted on: September 29th, 2008
​Both the Senate’s Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (H.R. 6049), which was passed on September 23, 2008, and the House’s Renewable Energy and Job Creation Tax Act of 2008 (H.R. 7060),...

Specific Benefits

Posted on: July 11th, 2008
Separate Retirement Plan Trust is the Best Choice I generally recommend that persons with IRA or qualified plan assets of at least $200,000 should consider a Standalone IRA/Retirement Plan Trust. ...

IRA Charitable Rollover and Other Tax Extensions Passed by House Committee

Posted on: May 19th, 2008
The House Ways and Means Committee passed H.R. 6049, the Energy and Tax Extenders Act of 2008, on May 15, 2008. ...

IRS Rules IRA Rollover Okay Even Though Taxpayer Was Deceased

Posted on: May 28th, 2007
IRS regulations allow an owner of an IRA to withdraw it for purposes of transferring it to another institution provided that the funds are placed in the new institution within 60 days. ...

New PLR on See-Through Trust and Life Expectancy for IRA Distributions

Posted on: April 19th, 2007
CPA Robert Keebler reports on PLR 200708084, pertaining to See-Through Trusts....

New Charitable IRA Rollover Guidance

Posted on: January 15th, 2007
Professor Christopher Hoyt of the University of Missouri School of Law has proved a useful summary of IRS Notice 2007-7, 2007-5 IRB 1, which provides guidance about Charitable IRA Rollovers. ...