By Attorney Philip Kavesh
The lead article of our newsletter often involves a personal story of interest by one of our attorneys or staff. However, this month we feel compelled to address a more serious issue, one that we see adversely affecting our clients and their loved ones on almost a daily basis - - costly IRA mistakes.
Although we, of course, do our best to properly integrate your IRA with your overall estate plan, we continually find IRA mistakes being made that are mostly outside the scope of what we do and control as your estate planners.
Here are just a few of the kinds of mistakes we are spotting (check if any of these apply to you):
- You pay more taxes on your IRA distributions than necessary because you're not aware of the available offsetting tax deductions or how a Roth conversion may be beneficial to you, your spouse and beneficiaries.
- You haven't been shown how to reduce or even eliminate your taxable required minimum distributions (that you must take after reaching age 73).
- You don't realize what your beneficiaries will really do with your IRAs after you pass away. Most likely they'll cash them out quickly, which may jeopardize their own retirement by losing potential tax-deferred growth. This is why you may consider getting our IRA Inheritance Trust® to help ensure that your beneficiaries will maximize their inherited IRA’s.
- You don't know exactly which beneficiaries your IRA custodian shows on its records (and if the beneficiaries are incorrect, your IRA may pass differently than intended under your estate plan!). You or your financial advisor should periodically check your IRA beneficiaries on record.
We don’t have the space here to cover in detail all the IRA mistakes we frequently see, but we can offer you some immediate help to at least avoid the above biggest mistakes.
If you have total IRAs in excess of $500,000 (including your spouse’s and any amounts you may roll over someday from a 401 (k) or other employee plan), give us a call and request a free consultation with one of our affiliated financial advisors at Pence Wealth Management.
Our goal is to help make sure you take proper care of your IRAs!
