This article also partially published in Northwest
Arkansas Living™ Magazine
Apartments Edition |
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401K, IRA and Estate Maximization; |
An Experts Guide to Tax Options & Estate
Planning |
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YOUR 401K OR IRA: |
A PROBLEM ASSET? |
By: Deborah Sexton, Estate Attorney |
Deborah Sexton Law Office, P.A. |
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| ...percentages each subsequent year. For example, at age 85, you would be
required to withdraw approximately 1/15th that year. After your death, you can get the
maximum stretch for the income taxation deferral by naming younger beneficiaries who can
stretch it out over their longer life expectancies. However, often you want to keep
younger beneficiaries from having control of assets. In that situation, you can use a Family
Retirement Preservation Trust™ to get the maximum stretch for
distributions after your death. Such a trust allows you to keep the assets in trust but
still look through the trust to the ages of the individual beneficiaries.
You can also start taking withdrawals from your retirement plan and use those
distributions to pay for premiums on a life insurance policy. While you need not take
withdrawals until after you reach 70.5 years, you may start taking withdrawals from
retirement plans beginning at age 59.5 years without penalty. The life insurance policy
can be owned by an irrevocable trust you set up. If done properly, the life insurance can
be outside your taxable estate. This can help avoid estate taxation and converts an asset
that is subject to income and estate taxation into an asset that is subject to neither.
Saving
for retirement is important. However, it is also important |
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| to consider how to avoid the unexpected tax trap retirement assets can
put you in. A qualified estate and retirement planning attorney can help you enjoy the
trappings of retirement without the tax traps. The law offices of Deborah Sexton offer a
wide variety of estate, tax, and wealth maximization options for clients. The firm is
based in Fayetteville, Ark. Deborah Sexton is a Northwest Arkansas Living™
magazine and |
| nwaliving.com™ contributing expert and
article author. For more information and/or to reach Attorney Sexton visit her on the Web
at: www.arkansasestateplanning.com,
or by phone at: (479) 443-0062. Deborah Sexton Law Offices are located at 2766 Millennium
Drive; Fayetteville, Ark. 72703. |
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| 401K, IRA, retirement, estate tax, income tax, uniform lifetime table,
family retirement preservation trust, FRPT, life insurance, irrevocable trust. |
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