Inheritance Planning Can Help Avoid Headaches

Your financial professional can help ensure you leave your estate in the best possible way.

Families inherit money and sometimes make the right moves investing and spending. Inheritances can also ignite disruption, divorce and a host of bad behavior far from the hopes and plans of the benefactor.

What happens when you leave what’s probably one of your biggest investments: your individual retirement plan?

Did you know that Individual Retirement Accounts, including Roth IRAs, are not protected by the federal government under ERISA, except in the case of bankruptcy?

Hopefully, most of us don’t need to worry about such creditor protection, but still, your estate plan is your legacy and it needs to be structured to best serve those you intend to benefit from your assets, including your retirement money.

Plan for Future Changes

Perhaps most important, your estate plan should address potential disruptions: the U.S. tax code will almost certainly change, your heirs will experience life’s normal challenges and opportunities and something you never considered may befall those you leave behind. Early death, disability and divorce all happen every day.

Planning ahead of time is key. What if you leave your retirement money to your estate instead of to a person? What if your beneficiary dies before you?

You could use specialized trusts to help mitigate many risks, such as the danger of a family beneficiary blowing the inheritance. A number of vehicles exist for restricting a beneficiary’s (irresponsible) access to the money. For example: an incentive trust that pays out only if the beneficiary meets certain conditions and goals. A spendthrift trust also allows for monthly allowances or periodic payments for either the life of the beneficiary or until the funds are gone.

You worked hard to save for your golden years. When the inevitable day comes and you no longer need what money remains, make sure you leave it behind the best way you can.

Your Financial Professional

Ensuring your financial house is in order and planning for the next generation are complicated issues that require professional advice.

Find a financial professional who knows how to deal with these types of issues. Find a financial professional who knows the ins and outs of various retirement accounts. Find a financial professional who recognizes the various benefits of different trust vehicles. Find a financial professional who understands how emotions can interfere with your inheritance plans. Find a financial professional who understands your goals.

Then make a smart decision and have your financial professional build you a custom–tailored financial plan.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

This article was prepared by FMeX.

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Keri Pugh

Keri Pugh is a Wealth Advisor with Fusion Financial Group, an independent financial planning firm and fiduciary based in Denver, CO. Keri has over 20 years of experience in the industry, as both a financial advisor and Principal. She obtained a bachelor’s degree in Finance from the University of Northern Colorado and is an alumna with national sorority Delta Zeta. Keri holds a variety professional licenses, carries the esteemed mark of Certified Financial Planner (CFP®), meeting rigorous education and experience requirements in key areas of financial planning, as well as the designation of Accredited Investment Fiduciary (AIF®), a symbol of her dedication to upholding the fiduciary standard for clients. As a wife and mother to two young children, Keri is particularly drawn to working with thriving families and women. This is not only reflected within her practice but also in her regular sponsorship of the local PTA and volunteer work with the elementary school. Outside of the office, Keri enjoys traveling, skiing, and the Colorado great outdoors with her family. She often lines up movie marathons for the family and, in line with many clients, is a beginner golfer and a wine enthusiast. To learn more about Keri, connect with her on LinkedIn.