Inherited IRA News

Information Current as of: 
09/17/2014

   LATEST 2012-2014 NATIONAL INHERITED

IRA NEWS

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June 12th, 2014

Supreme Court Removes Bankruptcy Protection For Inherited Retirement Accounts

Back in June, in the Clark v. Rameker court case taken to the Supreme Court, it finally was determined that inherited retirement funds DO NOT have the same protection as regular IRA type accounts still owned by the original account creators.

There are plenty of new questions this ruling brings in bankruptcy law, estate planning, etc.  One clear fact is that it shows a surviving spouse would be SMART to put the former spouse's IRA or 401-k plan into their own name now, so the legal reach of this determination can not remove bankruptcy protection for those inherited funds.  Yet some even question if a spouse can still do that and be exempt from creditors thereafter.  (I don't support that view)

Advisers Proceed With Caution Article

By putting the funds into an inherited IRA in cases where the surviving spouse is under 59 1/2 and wants withdrawals without the 10% penalty applying -- it is clear that it would remove valuable creditor protection. 

Also disclaimer activity could be deemed an illegal conveyance in bankruptcy court according to popular CPA and IRA expert Bob Keebler.  So, be sure to get professional advisory on ANY larger type IRA account BEFORE you make a move. 

Noting:  Some states had bankruptcy protection secured by prior court rulings.  Whether those former rulings have any weight now, will have to be determined in future court cases. And I will keep you updated as they happen.

Read more about the unanswered questions this ruling brings up at:

The Fastest Way To Lose an IRA

And to review the actual Supreme Court ruling:

Actual Supreme Court Case


March 5th, 2014

The 2015 Federal Budget Reveals...

the "Same 'ol Samo!"

Basically, a "redo" applies to all the failed retirement plan changes put in the 2014 budget, which failed to be implemented.  (Six out of seven anyway)  The one that concerns our firm the most is the restating of giving non spouse beneficiaries just five (5) years to remove the money and pay the taxes on it.

Since we work with $50,000 - to over 2 million dollar Inherited IRA account beneficiaries, this could become a drastic tax burden on the heirs, especially when there is only one child or beneficiary.  "Cruelty" is the best word to describe the intent behind these proposals...   M.D. Anderson

Cruel Tax Rules

Click Here or the Picture Above

 to Get Ed Slott's Opinion (CPA and IRA Expert) 


December 2, 2013

Wisconsin Cheese Money Showdown

Wisconsin cheese hat

Actually, it has nothing to do with cheese. But, that may be all a family in Wisconsin may have left if the Supreme Court rules against them when the case comes up for review as soon as January 2014.  

A previous circuit court was split on whether inherited IRA's are or are not IRA's after you die. (IRA's are commonly known as bankruptcy asset survivors you get to keep)  It may be the end for inherited accounts to be protected in America from creditor reach. 

My Tax Opinion?  When does an IRA not become an IRA, just because it was inherited by someone else? Does an inherited home become a car?  An inherited bank account become a mutual fund account?  It is still under the same IRS TAX rules folks...

I hope they determine these precious IRA dollars can be kept.  300k is a lot of money to rebuild a life... 

Full Story Link:  
READ MORE ABOUT IT


July 12, 2013

The Inherited IRA Battle Has Begun...

Inherited IRA Battle Begins

From Forbes Personal Fianance Online:

Click Link Below To Read Article

4 Steps To Take Now That Stretch IRAs Are Endangered

(Note: It will take a lot of polish to ever pass...)


Announcing...

FSI Legal Software

Law Firm Software Now Available!

June 25th, 2013

Well, it had to happen sooner or later. Watching bad advisors malpractice on IRA accounts for a decade and a half has been difficult.  Now, our firm has provided a smart resource to aid legal advisors in calculating the damage for their clients that have lost the longer "stretch" payout from bad advisor advice.

Left now with either a lump sum distribution (already performed), or a shorter payout period for large inherited IRA account balances -- recovery calculations should be performed on client accounts affected by the bad advice.

Make no more excuses to your own law firm clients complaining they got the short end of the stick from a bad IRA advisor or firm. If the statute of limitations has not expired -- you can help them calculate the actual damages and pursue a claim for recovery. 

Call us for more details:

Financial Strategies, Inc.

1-800-782-2806

(Sponsor of www.InheritedIraHell.com)

April 13, 2013
It's Back!
FAT CAT POLITICIAN
The politicians couldn't leave it alone. Now, they have proposed in the 2014 budget to force your inherited IRA into a maximum 5 year forced payout.  Yes, grandfathering is included for those being set up on current deaths that take place prior to it becoming law.  BUT FEW KNOW IT IS ONLY FOR YOUR LIFETIME! Even if your account gets grandfathered -- Your heirs get the same 5 year treatment in this proposal!

And of course, there is more bad news...  they also feel they can determine just how much money you should be allowed to accumulate in your retirement account (of any kind mind you). If it is more than approximately 2.5 million -- this new proposal may shut down your account for any amounts over that figure!


Read More from Wall Street Journal Article Published today:  LINK
 

January 2013
A New Year and a New 401(k) Government Program - Let's Make a Deal!

Government 401k to Roth Offer

No end is in site for a workable plan that fixes the current increasing US debt problem.   This risks everything we hold dear and true and frankly, it risks the things we enjoy,  the liberties and freedoms we treasure.  Drastic changes may be coming very soon. 

The new law has a deal for you.  You can now convert your 401(k) plan at work (Also 403b's, thrift savings and 457(b) plans too) to a ROTH IRA and you don't have to sever your employment or retire. Yes, you can right now, convert some or all of your employer sponsored and send the money C/O U.S. Treasury! 

Many financial writers have already published reasons to take the "deal" on the Roth conversion.  It's not for everyone.  Letting your traditional IRA just become an eventually taxable inherited IRA at your death makes a lot of sense.  Investing in real estate as a "hard asset" also makes a lot of sense.  Keep your cash in your pocket -- you never know when you may need it for.  


Missed Your RMD for Last Year?

Well, they have another deal for you.  You can get out of trouble as long as you tell your custodian to transfer the money to your favorite charity.  You've only got until January 31st, 2013, to count for 2012 tax year.

Fall 2012

There is big new news other than continued attempts by our elected national officials to revive former proposals that go back to 2008.  None of this proposed law is really necessary and some is confiscatory in nature to say the least. We are watching closely expecting something to "hit" most likely right after the election. Or if the government gets desperate for operating capital - even before the election!


June 28, 2012

National Health Care Survives

So, we think CPA Ed Slott's review of just who gets to help pay for it is in order:

 

And, we also thank Robert S. Keebler, CPA, MST for his timely sending out of his  "Understanding the Health Care Surtax Chart. Get your free copy HERE.


June 22, 2012

IRS Now Putting Focus On IRA Account Mistakes

The news is out -- the IRS has to report to the Treasury Department by October 15th of this year. Treasury wants to know ways to raise revenues by going after penalties and interest not currently being paid by IRA owners. 

The IRS has discovered they have been losing billions from collection activities by faulty systems, bad advisors, or just unaware IRA owners of when and what you can put into an IRA as well as take out of an IRA account.

Though this information covers ALL IRA's, the fact is that Inherited IRA's  type accounts are the worst for mistakes waiting to happen. Screw ups are legendary as you will find on this information website.

So the warning this month is real. Don't ignore the reason why major publications and news articles have all clearly stated that if you have recently inherited an IRA account as a designated beneficiary, hiring an expert is mandatory!

Read more about it from this excellent article from Wall Street Journal reporter, Kelly Greene:

IRA Rules Get Trickier

(Published Online June 22, 2012/Print edition June 23, 2012, page B7)


February 2012

Congress is trying to stop the "stretch-out" on FUTURE Inherited IRA's!

The stretch IRA may die at least for non spouse heirs.  Unless they are disabled.  (all kinds of qualified retirement plans eventually become eligible and are known as an inherited or beneficiary IRA at death if not cashed in) 

In other words, most people would be barred from any long term stretch out of income and tax deferral beyond 5 years in this new proposal. Though it has been verbally stated the provision will be removed from the pending transportation bill by the congressman that put it in there in the first place, it still remains as part of one of two proposals! (house and senate versions)

Senator Baucus states it won't become effective January 1st, 2013 for decedent deaths after that date. IF HIS WORD IS GOOD! However, as our graphic shows -- the end may not be far away. The cat is out of the bag. The juicy billions of extra taxation money this proposal could generate will not be easily forgotten.

Just as it is slipped on top of the back of a bill that really has nothing to do with estate or financial planning, it will come back again I am afraid. And, that is why you want to spend a little time consulting with our firm to make sure you know how to get your inherited accounts set up properly before any proposal like this actually does become effective.

For the many we have already helped, the good news is great news. YOU WILL BE GRANDFATHERED! (well in at least the provision proposed that they are pulling back out -- or are supposed to pull back out.) 

Confused?  Don't be. Read our site content and then set an appointment to chat by phone, in person, or by SKYPE. This is extremely important, especially for those thinking of cashing in inherited accounts this year. DON'T!!!  Not before you understand the value of establishing an inherited IRA while you still can. (You would then have the rest of your life to cash it in or take RMD (required minimum distributions) or any other amount you desire, while protecting the balance from instant taxation)

Call me for Free: 1-800-782-2806

Arizona's Monument Valley

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