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I have one for you!
 Missy here has a present for you but you better open it
before it is too late. You see, the
Inherited IRA Hell I am
talking about is completely avoidable if you take the right
action BEFORE a big IRA owner dies. Before, you're fine.
After, you could easily end up in
Inherited IRA Hell as
an heir. What is the hell? It is being stuck with needless
federal and state income tax on your beneficial share of
qualified funds (IRA, 401-k, TSA, etc.) left to you by your deceased loved one
but
indirectly since the death benefit must be paid first to
their living trust!
Because this procedure is becoming more common,
especially on larger IRA type accounts, having advisors
who were not able to find a way or know a way to avoid income tax on the proceeds
can become toxic after the death. It is a big mistake to
leave any qualified funds to an IRA for most people and
their situations. Yet, I get a case almost every week with
trust owned IRA proceeds and most of the time -- heirs that
contact me feeling they have not choices other than what
others are telling them they have to do.
Sometimes, this scenario is due to your
(or your relative's) current money advisors not being informed or experienced
enough to give the professional advisory EVERY client deserves. In
other cases, sadly, it is because they are too greedy to ever help you avoid
paying the high taxes due when a trust becomes a direct
beneficiary of the qualified funds death payment payout! By
telling you to take a lump sum, they try to influence you to
"stay" with them and invest what is left over with them
after the IRS and state tax authorities get done "reducing'
the money down as much as 50%!
There is a much more common way you as an heir can
end up in Inherited IRA Hell and it has nothing to do with
beneficial death claim payments direct to the decedent's living trust.
It does have everything to do with uneducated or incompetent
financial advisors who will wrongly tell you that the IRA
money has to be taxed, even if the situation is less
complicated!
Since, 2001 when the IRS added some
really neat features to IRA options after death, (obviously,
of no real benefit to the deceased IRA owner) money
advisors, accountants, financial planners and so called "estate planners" do not always get
it right. Then the features and options you deserve as heir
can either die with the IRA owner or not be presented to you
as an heir after the death!
In fact, I would bet that the information you obtain on
this free Inherited IRA (A.K.A. Beneficiary IRA) information website will bend your ear all the way
down to your wallet if you find out more options, after the
fact, then what your IRA advisor(s) told you were available
to you regarding your share of an
inherited IRA. Especially if they have already caused full
taxable income from your inherited IRA!
Malpractice and malfeasance in this area of financial
advisory and
practice is becoming legendary. In fact, if you are a law
firm owner and reading this information site, I would give
you the free gift of suggesting this new area of practice you should do
really well in, even if you start from scratch since heirs
are being mislead and victimized every day all around the
country.
That is because an estimated 10+ Trillion dollars in
qualified funds* still remains "after" the 2008 market crash
(and subsequent partial) and
is now resting in the hands of both Baby
boomers and Mature Adults here in America! Let me say that a
different way:
$ 10,000,000,000,000.00 !!!*
* "Qualified funds" is an IRS term for ANY tax favored
money that provides a retirement benefit to you and is under
special rules. The opposite is "non-qualified" funds which
do not get special tax treatment, but also are not
restricted as far as when you can draw money out without a
penalty, taxation, or both penalty and taxation at ordinary
income tax rates.
The game is on for all of the financial advisors in
America to try and get a "cut" of all of this
Qualified funds money as it changes
hands! Some will offer you fee based management, some will
offer you commission based products, and some will offer you
both. Roughly, 60% resides in equities and the other 40% in
fixed account type investments in our country.
And, on 12/28/10, the Boston Herald
quoted that 10,000 baby boomers in 2011 will hit retirement
age each day -- for the next 19 years! Adding in their own
401-k, SEP, 403(b) money with what they inherit from
parents, the total sum for some families will be
overwhelmingly the highest percentage of their estate
assets!
What is important here is that too many advisors are just
plain dumb about the taxation issues! And, because they are not
tax experts, and few are IRA experts (though some took a
class that says they are), bad stuff is happening as
this money comes out of the estate settlement process. Law
firms farm accounting tasks out to CPA's on larger estates.
Even CPA's have been sleepy, but they are waking up fast!
Many read this information site and respond to me knowing
they can count on the information we publish.
Instead of using the "S -- T -- R -- E -- T -- C -- H"
IRA concept and investing in a new "Inherited IRA" account
with the current or proposed account heir -- still too
many money advisors often tell the heir after the death to pay taxes on the
money and invest the rest with them! This can amount to a
40% cut for the IRS and state taxing authority and a 60%
remaining cut for the new account owner. Many times,
professional advisory isn't sought out and thus needless taxes are
paid on these IRA transfers that often are very large
-- and Inherited IRA Hell stays very busy
with new arrivals of victims every day!
Now, if you are a commission based seller of a product
(we hope it is a good product of course) -- which pays more
commission on an original $100,000 IRA account? The full
$100,000 in a tax free transfer? Or the remains after
taxation at about $60,000? And if you are a fee based
investment advisor (and therefore hopefully properly
licensed), the same logic works for you too! Don't let your
lack of tax knowledge cut your commission or fee income by
about 40%!!!
So, money financial advisors are being foolish twice, are
they not? They let the client lose needless tax money up
front, and therefore, they allow themselves to loose "money
under management" as well, regardless of how they get paid!
O.K., I didn't forget about you heavy weight advisors
with years of experience who are running those ads in the
paper telling people they are best to sell out their IRA
accounts, pay the tax, and invest with you.
Do you have it
right?
NO! YOU DON'T KNOW WHAT YOU ARE DOING...
The truth is these guys are usually just selling life
insurance with high first year commissions and really don't
understand the damage they are doing to their client. And,
they ignore or are not wise enough to understand the concept
of a potential perpetual increasing income stream on an
increasing tax-deferred principal base for almost an entire
lifetime. This concept is also known as the "super stretch"
IRA, which in reality is a money tree unlike any other you
could ever imagine!
Those advisors in a hurry to convince you to pay income
tax on any kind of IRA or 401-k/403-b money, etc. --
might just
be in a hurry to get some commissions out of you. Very few
professional financial advisors would tell you to "kill" what
is now becoming the greatest money tree in history! What I
am saying is that the IRS allows your IRA to grow to
unbelievable amounts even when required minimum
distributions must come out each year. The longer government
standardized mortality tables (Newest is the 2001 CSO
Mortality Tables) just made it even more lucrative to keep this
money tax deferred all of your life and then let your
children continue your "Inherited IRA" after you are done
using it. Only foolish or uninformed advisors tell you to
cash them in!
I am an experienced, tax smart financial advisor
and consultant that
truly understands the magic of a STRETCH IRA concept.
I can help you achieve perfection in the process of
receiving your new Inherited IRA type funds. The
hardest situation you may be in is my normal routine.
Since the field of Inherited IRA consulting started in 1998
after a favorable private letter ruling from the IRS, I have
been active and specialized in this field.
You can usually keep the money with the same
investment firm (sometimes it has to be transferred out to
avoid taxation) that your deceased loved one had it with. Or you can transfer the funds to another
brokerage account or firm as long as they agree to receive
the funds based on circumstances (Inherited IRA funds paid
to a trust are extremely limited to who will take them, or
keep them).
For Example:
Both J.P. Morgan Brokerage & Schwab will not
allow new Inherited IRA
money inside a trust, if division amongst the beneficiaries
is desired !!!
A recent case
with J.P. Morgan further restricted trust owned Inherited
IRA RMD's to the decedent's age! (Top Inherited IRA
Lawyer & Expert Natalie Choate would call that a "Tragic"
misunderstanding of IRS policy and law.)
When desired by you or warranted by
circumstances, many other new investment options in the
"fixed" category are available to you that can better
protect your principal invested. These exciting
options again allow you to AVOID PAYING THE TAXES UP
FRONT!
One fine alternative that is guaranteed to
protect and preserve your principal - is the
Fixed
Index Annuities offered by legal reserve insurance companies!
For safety sake, we serve as insurance carrier "broker" for
those wanting to tuck their Inherited funds into something
"safe" and that can not loose principal if held to maturity
via fixed indexed annuities.
But, the main importance right now is to
find an advisor who understands
what they are doing and... who they are doing it for. And, an
advisor who knows the specific companies who will be willing
to receive your new
"Inherited IRA" account funds and take care of you the
best way possible. In other words, he or she knows from experience which
companies are best suited for your needs and is trained and
experienced to handle these
accounts. Since advisors and firms are not fully up to
speed in this extremely complicated area of finance, you
will need to shop for more than just the best "rate".
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Yes
and no. Yes, they can usually stop the needless taxation if
they are consulted early and if they practice in this area.
But, no, they usually don't get asked to help until it is
too late. Once the IRA money is on fire, it is too late!
