While you are alive, your retirement accounts are protected from creditors, but as soon as you pass your account to a loved one, that protection disappears. All it takes is one lawsuit and POOF! Your life-long, hard earned savings could be gone. Your heirs could be left with nothing.
Thankfully, there is a solution to this problem. A special trust called a ?Standalone Retirement Trust? (SRT) can protect inherited retirement accounts from your beneficiaries? creditors. When your loved one (spouse, child, or grandchild) inherits your retirement account, their creditors are able to seize it and take it as their own.
Like most people, you want to protect your retirement account so your family can benefit – rather than the creditors. Here are 5 reasons why you need to protect your retirement account:
1. Spouses have significant combined retirement plans. Spouses can use an SRT to shield one or the other from creditors.
2. You are worried that one or more beneficiaries may be ?less than frugal? with the funds. Anyone concerned about how their beneficiary will spend the inheritance should absolutely consider an SRT as you can provide oversight, instruction and timing on how much they receive.
3. You have concerns about lawsuits, divorce, or other possible legal actions. If your beneficiary files for bankruptcy, is part of a lawsuit, is about to divorce, or is involved in any type of legal action, an SRT can keep those creditors from taking the inherited retirement accounts.
4. You have beneficiaries who receive need-based assistance. If one of your beneficiaries may need to qualify for, or already receives benefits from, a need-based governmental assistance program, inheriting from an IRA may cause them to lose those benefits. A properly-drafted SRT can help avoid disqualification.
5. You remarry and have children from a previous marriage. If you have remarried and have children from a previous marriage, your spouse could unintentionally (or even intentionally) disinherit your children. This can be avoided by naming the spouse as a lifetime beneficiary of the trust and then having the remainder pass onto your children from a previous marriage after your spouse?s death.
It Took a Lifetime and a Lot of Hard Work to Protect & Grow Your Wealth ? Don?t let Creditors Take All Away!
You?ve worked hard to save the money in your retirement accounts. When your loved ones inherit this hard-earned savings their creditors shouldn?t be able take it from them. Contact me and let me explain how an SRT can help you protect your retirement accounts and provide tax deferred growth.