Protecting Your IRA or 401k for Your Children

If you have children and if they inherit your IRA or 401k, they have other options available instead of having to take all of that money immediately upon inheritance out of the IRA or 401k and paying taxes on it. They can stretch out the money they inherit from your account and use it over their life expectancy and pay income taxes only on the money they take out from the accounts each year.

You can find out how much your required minimum distribution (RMD) will be over your life expectancy and how much your children could expect to inherit if the account is stretched.  Just go online to any one of numerous free calculators for inherited IRA’s.

In order to protect your children’s inheritance of your IRA or 401k from your children’s possible future divorcing spouses, lawsuits, bankruptcies and creditors, you may want to learn more about Retirement Plan Trusts.
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Karen helps attorneys; mediators, individuals and couples, navigate through the financial morass of divorce and widowhood. Her expertise lies in understanding the special tax and financial issues that can plague divorce and she helps clients get their financial fair share and equitable settlements. She provides financial analysis, projections and solutions so clients can avoid long-term regret over decisions made early on in divorce and widowhood.  Karen offers a range of financial, investment and insurance services that address clients’ complete financial picture and long-term needs before, during and after marriage.  She is currently writing a book entitled, “To Have and To Hold Onto Your Financial Fair Share: Financial Decision Making When Marriage Ends in Divorce or Death.”