Tax Traps: Are You Protected?

Did you know the decisions you make now may have serious tax implications in the future? I am not aware of any individual who wants to give money to the IRS needlessly and this is why having an IRA exit strategy as part of your overall portfolio plan is crucial. What’s equally important is recognizing how the decisions you make can also impact others, such as your surviving spouse or loved ones, that may be listed as beneficiaries of your accounts.

To help illustrate, I want to share a real story with you of a married couple who had an IRA worth $1 million dollars and planned to leave $100,000 to their favorite charity and the remaining $900,000 to their daughter. On the death of the surviving spouse, because the charity was listed as one of the beneficiaries, the entire IRA was immediately taxable. This resulted in a $400,000 tax liability to their daughter. This $100,000 charitable donation created a $400,000 tax liability and last time I checked, a gift to charity was supposed to give you a tax deduction, not a tax liability. This is one of many unintentional tax blunders that happens with poor planning.
What is your IRA exit strategy? Do you even have one? To schedule a Complete Planning Review, which includes a review of your beneficiary designation forms, call us (775) 853-9033, we would be happy to speak with you.

I also encourage you to tune into Redefining Retirement this Sunday on Channel 2 News at 5:30 p.m. as we discuss how to avoid other potential tax blunders.