IRA Beneficiary Strategies: Trusts and Charities, SECURE Act Changes, Avoiding Common Errors

Recording of a 110-minute CPE webinar with Q&A


Conducted on Monday, June 21, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This course will explain how beneficiary designations impact income and transfer taxes. Our panel of IRA experts will cover the caveats and considerations of beneficiary designations, including how to advise clients in specific scenarios to minimize overall taxation properly.

Description

Proper beneficiary designations are key to minimizing or avoiding taxation of IRAs, which can be the most significant asset in some estates. The rules surrounding the treatment of inherited IRAs and the taxation of these distributions are complex. The decedent's spouse has many options, including rolling the IRA into his or her own IRA, continuing to own the same account, or taking a lump-sum distribution. Each option has its own requirements and tax consequences.

Recent changes made under the SECURE Act require most other beneficiaries to withdraw an inherited IRA within 10 years after the owner's death. The tax on these withdrawals can be substantial. On the other hand, charities are not subject to income tax, adding to the appeal of charitable beneficiaries.

Designating a trust as a beneficiary provides a level of assurance that the desired beneficiaries will receive the IRA proceeds, the IRA will not be squandered, and/or that funds will be used for specific purposes. The trust instrument must also satisfy specific IRS criteria to be a see-through trust, and the language used must be clear to avoid any misinterpretations.

Listen as our panel of trust and estate experts explains IRA distributions and the related tax consequences. Trust and estate advisers need to understand the nuances of IRA beneficiary designations and how best to handle and correct improper designations.

READ MORE

Outline

  1. IRA beneficiary designations: an overview
  2. Individuals
    1. Spouse
    2. Non-spouse
  3. Trusts as beneficiaries
  4. Charitable beneficiaries
  5. Taxation of distributions
    1. SECURE Act
    2. Examples
  6. Common designation mistakes to avoid
  7. Traditional to Roth conversions
  8. Use of non-traditional investments in an IRA

Benefits

The panel will review these and other key issues:

  • Using see-through trusts as beneficiary designations
  • When designating a charity as an IRA beneficiary should be considered
  • How IRA distributions are taken and taxed after the SECURE Act
  • How to avoid common errors in beneficiary designations
  • When the estate should and should not be a designated beneficiary of an IRA

Faculty

Parthemer, Mark
Mark Parthemer

Managing Director, Private Client Services
TIAA

Mr. Parthemer is head of estate planning, investment and related advisory services for UHNW private clients. He has...  |  Read More

Pon, Lawrence
Lawrence K.Y. Pon, CPA/PFS, CFP, EA, USTCP, AEP

-
Pon & Associates

Mr. Pon has been in practice since 1986 providing comprehensive tax and financial planning, tax preparation and...  |  Read More

Access Anytime, Anywhere

CPE credit is not available on downloads.

Download