PLANNING FOR OWNERSHIP AND INHERITANCE OF PENSION AND IRA ACCOUNTS AND BENEFITS IN TRUST OR OTHERWISE AFTER THE SECURE ACT: The Estate Planner’s IRA/Pension Planning Guide
More than ever, recent changes in tax law make it difficult to understand and work with the rollover, aggregation/non-aggregation, creditor protection, borrowing, and Required Minimum Distribution rules as they apply to Plan Participants and their beneficiaries.
Add to that the complexity of grasping the different methods of calculating Required Minimum Distributions (RMDs), and when each of them applies.
Now try to get your mind around what post-death decisions can be made, and what flexibilities can be programmed into an estate and trust plan so that the best possible decisions can be made during the nine months after the death of the IRA/Plan Participant.
If the above were not confusing, add an understanding of how to determine the best way to integrate Roth and traditional IRA and plan distribution planning with QTIP marital deduction trusts, generation skipping trusts, and non-generation skipping trusts.
In their landmark book, Alan Gassman, Christopher Denicolo, Brandon Ketron and John Beck cover all these things in their comprehensive yet concise four-color book, which may be the best explained, and straight to the point, source of "everything you need to know" on this subject, from seasoned professionals who have been working in and writing about this area for many years. You’ll love the dozens of decision-making flow-charts, graphs, legal forms, comparison tables, and frank opinions. The authors have held nothing back in their sharing of ideas and techniques!
Here's what Steve Leimberg said about this important book:
You’ll find a great working analysis of the problems and range of potential solutions on IRA planning in today’s volatile environment. As Jerry Hesch points out in the book’s preface, “for each subject, the book provides a brief analysis of the reasons for the rules governing the subject.” Knowing why the rule was promulgated, it’s so much easier to understand how to both comply and to work with the rule – and to interpret the exact language in the rule that needs to be addressed in avoiding pitfalls and taking advantage of opportunities.
Jerry Hesch also points out that once a practitioner understands the Congressional purpose of a rule, he or she can much more easily and effectively communicate the extent to which and the methods by which compliance is necessary.
As is the case with all of the e-books by these authors that I have reviewed, this e-book contains frequent numerical examples to illustrate the application of the rules. That, of course, quickens understanding by both the professional and the client – and to a great extent eliminates or reduces the time and effort it takes to explain the importance of planning in the client’s situation. You’ll find loads of charts and explanatory tools that can be used to explain and illustrate the rules and of course, copious explanation, guidance, including IRS regulations and rulings, and references to books, articles, and reference materials that provide further guidance in selected areas.
Throughout the book, the authors provide multiple solutions and various planning techniques to solve a given problem. This makes it much easier for a planner to suggest viable alternatives and bring the client into the solution selection process – which is very important because of the significant change in the income tax deferral for inherited IRAs.
Bottom Line: Regardless of your level of expertise in this area, you’ll find this e-book to be an invaluable resource. This resource provides you with a thorough yet concise and easy-to-navigate and use guide to quickly master the primary rules, planning techniques, and traps for the unwary, and the SECURE Act has changed the ball-game.
WHAT’S IN THE BOOK?
TABLE OF CONTENTS:
Chapter 1 – INTRODUCTORY KNOWLEDGE
The CARES Act
Limits on Deductibility of Traditional IRA Contribution Based on the Plan Participant’s Filing Status
Converting a Traditional IRA into a Roth IRA
Don’t Forget Creditor Protection
2019 Pronouncement on Canadian Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs)
Grandfather Rules for Pre-1984 IRAs and Pre-1987 403(b) Plans
Prohibited Transactions and LLCs Owned Under IRA
Access Before Age 59½:
Access Between Age 59½ and the Required Beginning Date
The Coffee and Cream Situation (Partly Taxable Distributions)
After the Required Beginning Date
After Death of Plan Participant
Surviving Spouse Exception
Beneficiaries Other Than The Spouse
Pension Planning Considerations
CHAPTER 2 – PLAYERS AND DEFINITIONS
CHAPTER 3 – PRE-SECURE ACT IRA AND PLAN BENEFITS PAYABLE TO TRUSTS
CHAPTER 4 – PAYOUT METHODS THAT APPLY IF THE PLAN PARTICIPANT DIED PRIOR TO JANUARY 1, 2020
CHAPTER 5 -- Charitable Planning with IRA/Plans – Spectacular Opportunities Provided by the SECURE Act
CHAPTER 6 – CREDITOR PROTECTION PLANNING
1. What About Super and Exception Creditors?
2. Accumulation Trusts
3. Accumulation Trusts for Disabled and Chronically Ill Beneficiaries
4. Conduit Trusts
5. Marital Agreements to Protect Roll Over or Inherited IRA’s
6. Inherited IRA or Annuitization to Avoid the 10% Excise Tax for Withdrawals before age 59½
CHAPTER 7 – THE SECURE ACT
The More Things Change the More They Stay the Same
Now That We Understand the Rules, What Do We Do?
Trust Drafting Considerations
Use of the TEAPOT Trust System
A Refresher on Distributable Net Income and IRA/Plan Benefits Payable to Trusts
Possible Use of Section 678 Trusts
A SECURE ACT CHECKLIST
QLAC Math – Donald Duck in Mathematics Land?
Death Benefits of a QLAC
Other QLAC Requirements
Section 403(b) Plans and Section 457(b) Plans
IRA QLACs Better for Men, Non-IRA QLACs Better for Women
Defined Benefit Plans
Initial Disclosure and Annual Reporting Requirements
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