A Method To Help Families Minimize Taxes on IRAs

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0:00 How To Minimize Taxes on Traditional IRAs
0:20 Each Family Is Unique
0:48 It Is OK To Reduce Your Taxes Legally
1:21 How Much Income Tax on Traditional IRA
1:40 Why People Have Large IRAs
2:14 The Likely IRA Scenario
5:24 The Qualified Disclaimer Scenario
10:02 Summary of the Two IRA Strategies
12:31 You Have Three Options
12:47 Name Spouse as Primary and Children as Contingent Beneficiaries
14:31 Designate Children as Primary Beneficiaries
15:06 Designate Conduit Trusts as Beneficiaries
15:38 Why Few Will Take Advantage of This
17:06 What Will Happen If You Avoid This Video
17:44 What To Tell Your Family About Your IRA
18:30 Share This Video With Other IRA Owners
This video explains what you may not realize about IRA beneficiary designations and Inherited IRAs that could cause your family to send significantly more money to the IRS than they really need.
So what I’ve learned from 30 years of estate planning is that every family is unique and each family, each couple, and each individual needs to make their own decisions that are in their best interest and in the best interests of their loved ones. And hopefully this video will enable you to make better-informed decisions so that you can keep and protect more of what you have for yourself and your family, while sending less to the almighty federal government.
After all, our own United States Supreme Court stated in the 1935 case of Gregory v. Helvering, stated that the right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted. And to quote Judge Learned Hand, we may “arrange our affairs so that our taxes shall be as low as possible; we are not bound to choose that pattern which best pays the treasury. We do not even have a patriotic duty to raise our taxes."
So this video has to do with how much income tax families will pay on an IRA owner’s traditional IRA. We are not talking about the nontaxable Roth IRAs. We are discussing those not-yet-taxed traditional IRAs. Many people have large IRAs because they accumulate significant amounts in their company 401(k), and then retire and roll their 401(k) account balance over into a traditional IRA. In fact there are many people out there who, while they were working, they were frugal, they maxed out their contributions to their 401(k), some or all of those contributions were matched by the employer, and they retired with a healthy six figure IRA, seven figure IRA (which means $1 million or more), and in some cases eight figure IRA.
For Louisiana residents only: For prospective law firm clients who want to schedule a free 30 minute initial phone call with an estate planning attorney at the Louisiana estate planning law firm of Rabalais Estate Planning, LLC, go to: go.oncehub.com/Paul8
This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.
Paul Rabalais
Estate Planning Attorney

[@warrenbarnes9653]

The problem is that almost nobody has “four responsible adult children”.

[@janebishop5885]

Paul, as someone who is familiar with the twists and turns of retirement rules, this is an outstanding summation! I was not aware of the nine month disclaimer, thank you. Two things I would add: 1) owner should evaluate personal tax consequences with that of heirs and move funds under her own tax rate which might be lower 2) owner should advise heirs to take annual distributions and use that as salary while maximizing every dollar in their own 401 and IRA since, at one time a few years ago, the rules changed and allowed worker to select to put 100 percent of salary into 401 as long as the annual cap was not exceeded. Then cap out IRA as well. All of that assumes the heirs retirement accounts were not being maxed before the inheritance as is the case with my heirs....let me add that this change in distribution retirement rules in the Secures act is just another policy shift that hurts the little guys most and impedes lower to middle classes from building wealth. I just hope my life gives me enough time to reduce consequences for my heirs. .... retirement rules are too convoluted and shows the corruption of our leaders.

[@alrocky]

Informative clear explanation in 19 minutes in 1 take no editing!

[@bamalam9622]

I've watched a lot of your videos over the last couple of years, Paul, and they are uniformly excellent. The content of this one is is really top notch. Thanks for the great value you provide to your viewers.

[@americasestateplanninglawy1946]

Wow, thanks

[@zblgran944]

One of the very best you’ve taught

[@ludytamondong2140]

Can i have a contact phone #? I am 85 y.0. Abd i need to talk to someone about estate planning​@@americasestateplanninglawy1946

[@rosskline]

For advisors who see the bigger picture (like myself), advising the spouse to disclaim part of the IRA for the kid's benefit and then explaining why to the kids... gives you a really good chance of earning the kid's business! You do well by doing what's right.

[@kingtutt61]

Ross…You’re absolutely correct. Too bad people line their pockets with small change where if you just do the right thing, people will see you’re honesty and you will acquire a larger following.

[@carloscorletto4416]

I really enjoy all your very informative videos, you are absolutely making all the confusing estate planning events a whole lot more understandable. There’s so much to learn, I am amazed at how you are able to to keep it all organized and explain it in a simple fashion to all of us that are not as gifted as you are. OUTSTANDING WORK.. thank you.

[@gailgreif4417]

Thank you sir. This video is extremely relevant to our family. I had to watch it twice to “get it”, but what valuable advice. Literally - valuable. Thank you for the service you are providing to those of us untrained in these matters! You rock!

[@gilz2253]

Excellent and very timely presentation Paul. I've sent a copy of it to my wife for her to watch and then we'll discuss the path forward. FYI my estate attorney has never mentioned this to us. Thanks again.

[@llw2226]

Wow you are top notch!! I’ve never really understood this stuff but you explain things so well!!! Thanks for making these videos sir. 😊

[@mommaoinnh2674]

Christine should buy a vacation home between where all 4 children live, and help pay airfare to see her kids multiple times a year. It’s crazy to put it all in accounts. Enjoy that money, enjoy your family, and have a vacation home that is gaining value. It’s not all about Money!

[@ricfax]

As a financial adviser, I absolutely agree that there's an inherent conflict of interest that will test the integrity of the widow's adviser that many will sadly fail. An adviser who is knowledgeable and takes their fiduciary responsibility to put clients' interests ahead of their own seriously should not hesitate to explain this. But I fear many won't and many advisers, also, do not have licences that require them to put the interests of clients ahead of their own. Their licenses are basically to peddle financial products and investments that are merely "suitable" which is a far lower ethical requirement than having a fiduciary responsibility. Bottom line: Be informed; have family discussions; and don't leave this up to others because they are too frequently uninformed or unprincipled (even if you regard them as a family friend).

[@KordTaylor]

I’ve been binge watching your videos over the Christmas break as my wife and I are trying to sort our estate stuff for our son. Thank you so much as they are a great help. For this specific video you might try also having a shorter edit with some business graphics as your user stories might benefit? But again thank you so much. 👏🏻

[@jeffeng3945]

Paul, thank you so much for this video with such valuable information that I was never made aware of. This is one of your very best. You explained and illustrated everything as clear and thorough as always. Take care.

[@americasestateplanninglawy1946]

Glad you enjoyed it!

[@TheBeagle1956]

Excellent video! Great information I had never considered before. Keep up the good work!

[@mariondiemert430]

Done. This was mind boggling, but genius. Thank you!

[@davidseibert5268]

One of the best estate planning videos I’ve ever seen. Thank you so much. Your message is very applicable for so many people.

[@rhymereason3449]

Excellent discussion! Thanks so much for freely sharing your knowledge 😊

[@bmiles1232]

Another very good presentation. This works out best when there is a 10 yr separation between the death of the married couple. Of course the surviving spouse needs to feel comfortable with giving up the bulk of Bob's IRA. If the kids are smart and disciplined, they will draw the inherited IRA over the 10 yr with tax consequences in mind. I am designating our trust as the beneficiary. That way the assets can be divided up in the trust with charity drawing from the high tax IRA, the kids drawing a combination of IRA, after tax assets, and finally Roth IRA.

[@lardogw4337]

Excellent advice, another great video. Easy to understand and thank you for going through all the options.

[@jokedog]

The content of this video and your channel is pure gold. Thank you so much. This is the exact education I needed. You're so correct people always advise you to speak to an accountant or financial advisor but this is beyond their scope of work or duties. Thanks for being the financial friend we need to guide us.

[@oceanwaves3139]

thanks for all your videos; i wish you practice in my state; i would be the first one when you open the door. To me, you are honest and someone i would feel comfortable entrusting with my estate planning

[@Jeff-gd8ev]

I take issue with a lot of financial videos on KZbin, as so many are either misleading or give incomplete information. This one was excellent. How about this as a modification to the recommendations in the video: start to convert money from Traditional IRA to Roth IRA, as much as you can afford while still living. Then set the primary beneficiary of the Traditional IRA to your kids, and the primary beneficiary of the Roth IRA to your spouse. The spouse thus gets the money he/she needs to live on, but it's tax free forever, and the kids receive taxable money that they can liquidate over 10 years.

[@robertheim352]

Thank You. Your point about inherited money benefitting the heirs is the primary goal in my mind. I call it investing in my children. I take more IRA distribution now (at age 68) such that I can gift money to my responsible children; reducing their money worries in mid life. I encourage them to make investments so that they can be comfortable in their retirement. Your presentations are very good, and thought provoking!

[@philipdamask2279]

I made the 3 children the beneficiaries of one of my IRAs because my wife has her own IRA and will still get another one of my IRAs.

[@allisonmanxr2002]

Hi Paul. I have been a long time subscriber and wanted to express my appreciation for all the valuable content! I watch each time you provide new content. Thank you so much! Your information is very educational and informative. This is my first comment and am doing so to wish you and your family Happy Holidays! Rod from Myrtle Beach, SC

[@americasestateplanninglawy1946]

Thanks Rod. That heartfelt message means so much to me.

[@donreinholz8121]

Great video. This is why having too much money without spreading it out can really hurt your kids since the law changed to 10 years before having to start withdrawals can really penalize you with the highest tax rate.

[@avinashagarwal6276]

Many thanks for this wonderful video! Extremely informative!

[@jimf710]

I was planning to use the same strategy for my TSP (401k) account. While I don't HAVE to take distributions until 72, I'll take some out between 60-72 up to the point of the next marginal tax bracket. I'll pay the lowest possible in taxes and then I can invest it in something similar. Moving it from pre-tax bucket to post tax bucket. Don't want to waste the space in my lower bracket. Playing with my spreadsheet made me see while I love to hold on and not spend, doing that will make me have huge payouts in my later years. Why 'starve' myself when I'm younger and have good health. Merry Christmas everyone.

[@souyang1]

That's exactly what I have planned as well. I also give kids $6k to their Roth IRA account each year as gift. They can invest as they wish. By the time they are 59.5 year old, they can withdrawal from the Roth IRA without paying taxes.

[@jimf710]

@@souyang1 I'd like to hang out with you. I've also been funding my teenager's Roth for a couple of years. I'll be long gone but by the time they're 60, they should be in great shape.

[@tomgrimmer947]

You might want to consider rolling over the withdrawals from age 60-72 to a Roth IRA as your post tax bucket. Everything grows tax free and no RMD required.

[@jimf710]

@@tomgrimmer947 Thanks for the thought. I was already maxing out my Roth.

[@larryjones9773]

@@jimf710 There are limits on Roth contributions, but there is no $ limit or age limit on Roth conversions (moving money from a 401K/IRA to a Roth IRA).

[@280zone]

Thank you so much for putting this together is a very understandable way!

[@americasestateplanninglawy1946]

You're very welcome!

[@SophiaCVeng]

Thank you for valuable info.🙏❤️I shared and liked👍

[@muhammadlimon1369]

It was amazing. I like this type of content thank you

[@donf18]

Good and valuable info presented very professionally, thanks Paul

[@LadyCatherine538]

Time well spent. Thank you.

[@quyd72]

Awesome. Thank you for the best topics.

[@brianharbour8833]

Mom passed away in 2019 with a large traditional ira. Dad was alive. We decided to make my brother and sister and me beneficiaries of mom’s ira. Dad does didn’t need it. Our inherited iras from mom are under the old rules. Dad died in 2021 with a traditional ira. Me, my brother and sister inherited dad’s ira. I was thinking of waiting until the 10 years before taking anything out. Maybe we should take out in 10 payments. Mom and dad both had large taxable brokerage accounts. We got all this money with a stepped up cost basis. No taxes. All this makes me think you shouldn’t put money in traditional ira. It’s full of traps.

[@mikem6796]

How did you not pay taxes on it?

[@spudmcdougal369]

@@mikem6796When you inherit a non Tex sheltered brokerage account, the basis is stepped up to the value at the time of death.

[@barbjacobson336]

THANK YOU SO VERY MUCH for your informative videos. After learning about the potential for disclaiming an inherited IRA I spoke for our mutual fund estate group and learned how very simple it is to accomplish this! Nine months from the date of death to disclaim. Spouse send simple statement to the mutual fund company. Account can then be transferred to the contingent beneficiary/beneficiaries. More complicated if contingent beneficiary is not named.

[@americasestateplanninglawy1946]

Nice!

[@leonardmark8201]

Excellent, clearly explained analysis.

[@carolwilliams2356]

Whew. I am exhausted. Now if someone will just leave the IRA to me. Very good video.

[@tryan7]

Mr. Paul, Your information is top notch. You present the facts without any emotion. I like that. I'm from the Midwest, Chicago area. I know there are slight differences from one state to the next. Does this information apply to the entire U.S.A.? Anything else I should know regarding this subject. Thank you in advance.

[@HB-yq8gy]

Paul is a smart dude I think our will/ testamentary trust has that spousal disclaim option.

[@amerlin388]

Excellent coverage of topic. My wife and I each have sizable IRA's and earlier this year we set up beneficiary 40/40/20 split between our two sons and the surviving spouse, though I'm thinking of reducing sons' percentage on my IRA - the larger one because it still might push sons into an uncomfortable tax bracket. Of course it's worth reminding people they can still take IRA distribution and/or convert to Roth during years to max out a lower tax bracket - especially after start of retirement and before starting Social Security. Also, free to gift up to $15,000 to each child (or anyone else) each year.

[@donf18]

I think it's $16k/yr now

[@lnbt1]

Thumb up! I subscribed!!! Very informative and Thank you so much! Can you also please make the video about Roth IRA with the same situation? I understand that Roth IRA is non-tax. But how long spouse / children (inherited) can keep the account and any recommendation ? -Thank you so much!

[@dogmama2many]

Thank for sharing your brains with us!

[@hannaJardin]

Thank you so much for this valuable amd helpful video!

[@catherinebullock9748]

Thank you… this is exactly my situation.

[@thomasdipaolo2349]

Excellent video. As always. Will definitely share

[@americasestateplanninglawy1946]

Much appreciated!

[@FaylenesWorld]

Excellent content. Thanks for sharing !!

[@stevemueller9832]

I’m a new viewer/subscriber, Excellent information and clearly presented. Wondering about disclaiming if the primary beneficiary is a trust can the ira still be disclaimed to children/contingent beneficiaries?

[@beckylane1588]

Wow, what a variety of comments. Thank you for being "thick-skinned" enough to persevere through it all👍

[@ginas9317]

Very informational. Thank you

[@CC-hr4vr]

Great information very insightful

[@Chris.Brisson]

I'm taking notes.

[@prospatacsil1378]

Very informative . Thank you. Is it better to use the revocable trust as the ira beneficiary?

[@kevinfh44]

Very informative, thanks for the information

[@SaltWaterSalmon]

I just watched "scenario 1" from this video happen to my GF's father's estate! We had the help of 2 CPA's, an attorney versed in estate planning and (to a very limited extent) a fiduciary financial planner...NOBODY said boo about the smarter "scenario 2" referred to in this video. What a shame!

[@rstrouts]

Paul, For a future video, under what circumstances are TOD's/POD's/house, car, etc., beneficiary deeds (in applicable states), etc., preferable to trusts, or not preferable at all?

[@eddieadams4770]

Paul, geat videos. Really like them. On your two hypothetical where you have the deceased husband's 2m IRA rollover into the Wife's 600k IRA on death and then the whole 2.6 million passes to the 4 children v. wife disclaiming 80% of husband's--don't you start comparing apples to oranges because you have the kids taking annual withdrawals in the lower tax bracket whereas you didn't have Wife do that. In the first scenario, If you had wife withdraw annually for 15 years and then had the kids withdraw annually for 10 years, I think you'd find it just as tax frugal and much more to the benefit of wife and kids. The whole point of having money is enjoying what you can do with it, not just avoiding taxes. For example, let's say wife doesn't need husband's 2m but pulls it out and buys a vacation home for her and the kids in Lake Tahoe, CA. Well, over 15 years that vacation home is going to double or triple in value (compared to 5% return in the IRA) and they can enjoy it and create priceless memories in Lake Tahoe and when mom passes, the kids get a stepped up basis.

[@moneymusicmindset]

Generational wealth planning is going to be the planning model of the future I believe. People will need the wealth of a family unit to survive - going alone in the future will be more and more difficult based on our current trajectory.

[@JK-xg8mz]

I so appreciate you!!! Thanks!!!

[@bobpadrick7718]

Excellent, Paul. The one scenario you didn't cover is where Bob and Christine create "The Bob & Christine Family Trust," and then they each name that trust as the primary designated beneficiary of each of their IRA's. But, if I follow your example, that is less desirable because by the time the kids get it, the combined IRA's would be worth ~$5M and each kid would get about ~$1.25M. So even if they take only 10% each year, that's ~$125K, which means they can only make another $23K more for the year before being bumped up into the 24% tax bracket on all of that year's earnings. Did I get that right?

[@Harry_16710]

Brilliant - so much useful information; I hadn't heard of disclaiming an inherited IRA! Thanks for sharing your knowledge, Paul. 👍🏼

[@americasestateplanninglawy1946]

Wonderful!

[@tomgrimmer947]

Actually not really disclaiming an "inherited" IRA; it's a "spousal rollover IRA" which is different than an inherited IRA

[@josephroberts7374]

Another option: The wife can keep the deceased husband's money separate from her IRA, in a separate IRA. She can then take withdraws out of this, in larger sums, and then distribute the money to the children if she wants. She is likely in a lower tax bracket than the kids, since she is retired- further saving more money in taxes. When she dies, it will then transfer to the kids, and they can take out 1/10th per year, over 10 years. This allows the wife to keep full control over the money, in case things change and she later needs it, and it lowers the tax bill on everyone. It also delays the 10 year clock, since that does not start when it is inherited by the spouse, but it would start 15 years later, in this scenario, when the kids inherit it from mom. Thus giving a total of 25 years to take withdraw the money, instead of only 10 years.

[@suzanneemerson9787]

@joseph roberts I laughed when I read that because she’s retired she’s probably in a lower tax bracket. I’m retired, and having to take the annual RMD from my IRA account and add it to my pension to determine my taxable income. I saved the max and invested it well. Now I’m in the very highest tax bracket. That never happened in my entire working life. My pension is half what my salary was, but I’m paying nearly 40% Federal tax on it. Plus California.

[@parler8698]

Excellent idea.

[@lifesabre]

Would you recommendation change if the amount of the IRA was significantly higher and the beneficiaries were already making high income salaries on their own? And the number of beneficiaries was less? Understanding you would still want to avoid the ten year lump sum I’m more asking about the distributions. Thanks for the great videos very helpful to all that view.

[@andielliott7721]

Paul, A question about Annuities and nursing care expenses. If the annuity is lifetime for both husband and wife and one of them needs to go into a nursing home, how much of the annuity income will the government require to go towards the nursing home expenses...provided there are no other qualifying assets.

[@vincentlee4799]

Really interesting topic, of course none of us know the future tax changes by the Congress or Wash Admin. But, interesting - I suspect many spouses will not have any clue what to do and will just have the money flow based on how the decease spouse set things up. At this time in the living spouse life the mental understanding of some of these complex financial decisions may not be possible. Maybe the first spouse should leave written instructions, but obviously tax law can change and there will probably not be anyone that has the understanding to make a revision in the original plan or thinking from the spouse that pass away.

[@meltdownman1]

More of a tax/Roth IRA question. If my nephews and nieces have a 401k (or 451) and contribute also the full annual amount to an IRA, can I gift them the 15k limit and put $6500 it into another IRA for them or is does the annual limit apply and they cannot contribute to an IRA with me doing it for them? Can I contribute to a ROTH while they contribute to a traditional IRA for a total of $13,000or does the annual contribution limit of $6500 apply for a combined IRA and ROTH accounts? Excellent video. I have subscribed.

[@gust9464]

Excellent video, thank you! This might be a little,of topic, but I had 2 questions, can you only use 25% of your income (1099) & are you allowed to use your IRA to buy a primary residence without any penalties (due to covid situation)?

[@tanvdoan]

Knowledge is power. This video is powerful. Thanks

[@dalebulgrin2702]

What about the taxes paid each of the 10 years, on the now taxable investments each child took? The 10% withdrawn each year would then be invested and any gains would be taxable.

[@pkicng210]

But like in any defined plan, what is the reason for having a third party administrator or what is their function? Who determines the minimum required distribution? I don't know because I am still trying to get a ruling by completing the Generals METHOD worksheet.

[@gcburkett]

Never thought of doing this.

[@M22Research]

This is excellent, forward-thinking advice, clearly explained. One wonders whether even 5% of the families who fall in this situation even consider such a smart strategy?

[@M22Research]

@RabaIais Estate PIanning LLC° I’m not clear on the meaning of this response? (The question in my comment was rhetorical - as in - this is excellent advice where likely very few families even realize what they do not know and what they are missing!). Thanks again. I have shared your video with multiple friends.

[@americasestateplanninglawy1946]

Looks like I was hacked by someone who put an asterisk after LLC. I have reported it. Thanks for sharing my video BB.

[@M22Research]

@@americasestateplanninglawy1946 aha, got it. Thanks.

[@llw2226]

Oh my goodness 🤯

[@elainethepain9418]

You are amazing... I learn SO much and it's so valuable! Thank you!

[@rxrodrigues]

When Christine disclaimed the $2m inheritance, and if Christine also filed IRS Form 706, when Christine dies, would the total estate benefit from a reduction of $2m and still have Bob’s full estate exemption added to hers when calculating estate taxes then?

[@weizheng673]

Thus, in general income deferrals is costly in tax. Am I right? In addition to 401k, I also have executive deferral. By delaying income, I will subject to higher tax

[@francispinto8721]

The IRS is now requiring annual RMD's for inherited IRA's that fall under the 10 year rule. No option to wait until year 10. ROTH IRA's have no RMD but must be drained by year 10. The spouse is exempt from the10 year requirement. Beneficiaries who inherited an IRA prior to 2020 are grandfathered and can use stretch rules.

[@minhvinhtube]

We're in between 22% vs 24% tax brackets. I have to max out TSP traditional to stay in 22% tax. Should i just pay 24% and contribute 100% to Roth TSP? Thanks

[@Teri_Head]

Good information

[@jdett3863]

Great information but cant relate because I dont have a million dollar IRA. Can you provide information regarding federal taxes on much smaller IRA? Does your advice hold true with much lower amounts?

[@harryl7946]

Now I need to seek out a Trust and Estate lawyer of which also knows tax laws. Maybe an accountant as well! 🤔

[@travisthompson3700]

Great Information 👍

[@americasestateplanninglawy1946]

Glad you think so!

[@lifewithmargot]

This is why my moms financial advisor doesn’t want her to do a Roth conversion per my suggestion… what can I do?

[@mlee1308]

What about doing a Roth conversion on the large trad 401k.

[@amerlin388]

Can the non-spousal inheritance potentially be spread over 11 tax years? Suppose I die July 1, 2051. My two sons inherit large portion of my IRA and can take 1st distribution in second half of 2051. They take further distributions in years 2052-2060. And an 11th final distribution in the first half of 2061? Still within 10 years, right?

[@billsfone]

Still confused as to the 5 year rule and the 10 year rule... My Dad passed away this year, had his Trust as the beneficiary of his IRA. We were told by Fidelity after creating Inherited IRAs that we must withdraw all within 5 years??

[@RaphaelQuixote]

Hi Paul, a small question in two parts: 1) Assuming the inheriting spouse makes the usual mistake and passes on the entire accumulated 6-million-dollar IRA to her children when she dies, would it still reduce their taxes if they took 10 annual payments from that point on? And (2) What if the entire IRA is only worth 1 million when she dies, and there are three children? In that case would it be better for them to let it grow for as long as possible?

[@stacyrohleder5370]

My head is swirly after this one

[@chanks9315]

Thank you Paul! Another very informative video!! I'd already figured out the benefit of Scenario #2 but I'm having problems understanding how to set up beneficiaries for an IRA. Rather than naming beneficiaries directly in my IRA, I'd like to create a Conduit Trust within my main Trust as the IRA beneficiary and leave very specific instructions in my trust on how I want the IRA distributed. Can you offer any advice? For example: The Conduit Trust is named as beneficiary of the IRA I want the IRA to be distributed in 10 equal, annual amounts to the Conduit Trust. I will have each of my two children and four grandchildren identified as beneficiaries in my Trust each with a specific percentage of assets defined I want each of the 6 family members to receive their % of the annual IRA distributions in 12 equal amounts. (monthly) Will each beneficiary need a Conduit Trust of their own? Will each monthly disbursement have taxes withheld? What will be the tax rate of each monthly disbursement?

[@K5310]

Can this conduit trust you mention be the same trust as the “cash income trust / medicaid trust” ? Or you suggest to set up two separate trusts?

[@timberrocks1]

My lender is demanding my power of attorney in order to refinance, I am local and able to attend settlement is it legal for them to demand this from me?

[@KeithRowe1971]

Thanks for the great information. I have enjoyed your videos and appreciate your hard work. This year, my mother - in -law inherited money from a deceased cousins estate. The case went through probate (Intestate) in South Dakota. The deceased had no children, husband, or living siblings. The line of succession went to all of her first cousins. Some of the inherited assets were life insurance proceeds. Some was in cash. (checking and savings) and a large chunk was from her State Pension and 401k account. I. know that her 401k company took out 8k for taxes before they sent a check to the estate executor. I am not aware of the tax on the lump distribution from her State pension account. After a year, the estate sent each cousin a check for about 30k. Since the death was in South Dakota, there are no estate taxes, or inheritance taxes. Is the 401k and pension portion of the distribution taxable as income? Thanks for your time!

[@maggie-iv6ot]

Thanks

[@jeffbricker8763]

Does the future value of the father and mother IRAs account for MRD ?

[@brendahere]

LOL, MY mom is Christine and my dad IS bob. Maybe I need to pay attention to this.

[@moneymusicmindset]

Any opportunity for wife to use distributions of husbands spousal IRA to fund an ILIT using a life contract with chronic care benefits to further protect from high cost of long term care and pass the tax scrubbed dollars though tax free life insurance proceeds and simultaneously protect from potential estate taxes if she should exceed the threshold or if future tax laws Change or revert to old estate tax levels? So, diffuse the IRA tax time bomb, create all future tax free dollars, protect from long term care costs and avoid estate taxes if estate taxes should crawl back down.

[@williamtoomey3838]

Except that the IRA generally it is not part of the estate and can't be disclaimed. The distributions will be made to the named beneficiaries.

[@Imsierrabound]

If the inherited 401K contains appreciated company stock then the children should consider executing an NUA on the disclaimed amount and pay capital gains tax instead of ordinary income taxes.

[@gary62or45]

Sir, is it true that you can actually take an additional distribution from the inherited IRA during the year the father dies, and then start the 10 year distribution rule?

[@careinm]

Ok so my husband died in August and his IRA went to me as his spouse, so it is too late for me to take advantage of this option. What do I do now? Of course, we are only talking about 100's of thousands dollars not millions of dollars.

[@maryricketts7337]

Anyone who has an IRA that’s large enough to incur hefty taxes needs this information.