IRA, Estate, Inheritance, and Tax Planning

Also known as Financial Planning


Fees for these services are taken on a case by case basis, however for the typical Household that is Married Filing Jointly, the cost is around $1500.  Should you own rental property, one or more businesses, or have a much more complex situation, the fee will typically be in the $2500-$5000 range.

IRA Account Planning

Although the planning and investment management of IRA accounts fall under several of the other pages on the site, IRA accounts themselves have some very particular, and if not handled correctly, expensive tax issues

Some specific IRA planning steps are:

1. Income planning strategies to minimize tax bills (including taking advantage of NUA if possible)
2. Compliance with Required Minimum Distribution rules (Violations incur a 50% penalty)
3. Assisting in the often complex decision for spouses to inherit vs. rolling over a deceased spouse’s IRAs
4. Tax planning strategies to help your beneficiaries with the Income with Respect to a Descendant (IRD) tax
5. Working with 401(k) accounts in efforts to overcome the inability of non-spouse beneficiaries to stretch required distributions (and therefore have higher and immediate tax consequences)
6. Reviewing and Educating on the default beneficiary designations as dictated by the plan document

Tax Planning

This is taking a look at your entire financial situationa, and with your accountant, planning where possible so that extra and unnecessary taxes are not paid.  When you consider all the types of taxes there are (income, estate, gift, inheritance, AMT, FICA, Social Security, etc.) it’s easy to see that without very focused planning, one can give more than is required to the state and federal government.

Some of the techniques used may be family limited partnerships, income shifting, stock option planning, and various types of trusts.  Some of these areas will require the use of an attorney with knowledge specific to these strategies. 

Estate Planning

Typically when people think of estate planning, they think of estate taxes and the very rich.  This may impact more people than you would think.  Under the current tax code, the excludable amount for 2008 is $2,000,000.  Next year it goes up to $3,500,000, then $0 for 2010 and then back to $1,000,000 for 2011 and beyond.  When you add up all your assets (and don’t forget to count in your real estate), then factor in future growth of those assets, many more people than you would think will have some sort of estate tax issue.

Some other issues that may cause estate tax planning issues are that as of the writing of this, 18 states have decoupled their own death taxes from the federal taxes.  In addition, many people have purchased second homes for vacations or to spend the winter in a less harsh environment.  An unplanned estate such as these will have to probate assets (and spend more money to hire attorneys) in all the states where property is owned.

Inheritance Planning

With a larger portion of families having some sort of “blend” to them due to divorce, early widow-hood, re-marrying, etc., inheritance planning focuses on where you want your assets to go after your passing.  Obviously there will be tax issues, but equally important is to make sure that you don’t accidentally disinherit or significantly short change an intended beneficiary(s).

One area that is often over-looked is the IRA beneficiary designations.  Many people think “it’s covered in my will, or covered in my trust.”  The beneficiary listed (or not listed) on the IRA or 401(k) account ALWAYS over-rides what is specified in a will or trust.  Not only could this cause HUGE tax consequences, but as I said earlier, can disinherit an intended beneficiary(s).

Another item that may need planned is for that child (or their spouse) who needs protected from themselves.  It would be a shame for the assets you worked hard to grow be wasted away in such a short time after your passing because an adult child can’t get out of their own way.

Contact Us 

(317) 203-4001

3928 Clarks Creek Road, Plainfield, IN 46168

M-F: 8am-5pm, S-S: Closed