As we build wealth, we naturally desire to pass that financial stability to our offspring. With the grandkids, especially, we often share a special bond that makes us want to provide well for their future. However, that bond can actually turn into a weakness if proper precautions aren’t set in place. If you’re planning to […]
Twenty years ago, the Roth IRA first became available to investors as a financial tool for their estate planning needs. These accounts have maintained their popularity because unlike their traditional IRA counterpart, a Roth IRA provides account owners tax-free income during retirement.
In fact, many people chose to convert their traditional IRA or 401(k) plan into a Roth IRA to benefit from this long-term tax advantage. (Of course, there is a current tax bill that has to be considered when you make a conversion.) The recently enacted tax reform, however, has removed one helpful opportunity: the ability to recharacterize — or undo — a Roth IRA conversion.
In the event of your untimely death, the manner in which your beneficiaries — or those people who receive your assets from your estate — are determined is highly dependent on how your property is titled and if there is a beneficiary designation.
Generally, property with title includes vehicles, boats, airplanes, real estate, bank accounts, savings bonds, life insurance policies, retirement accounts, and stock certificates. If you die without a will or a trust and haven’t used any beneficiary or transfer on death options, state law will determine who inherits property with a title. On the other hand, property without a title, such as jewelry, antiques, art, and even your digital assets are usually provided for in your will or trust, and if you don’t have one typically goes to your heirs at law. As you can see, who you have listed as a beneficiary — and not having a beneficiary designation at all — can have serious implications for your family after you have passed away.
The IRA charitable rollover provisions provide an important giving opportunity for retirees who are charitably inclined. This is particularly following the recently passed Tax Cuts and Jobs Act of 2017 (the “Tax Act”). Because the Tax Act will significantly reduce the number of taxpayers who itemize, and so fewer taxpayers will benefit from a charitable deduction for annual giving. However, the IRA charitable rollover provisions allow some retirees to receive a tax benefit for their generosity, regardless of whether they itemize deductions or not.
