Q1: What is retirement asset planning?
A: Retirement asset planning focuses on structuring IRAs, 401(k)s, and other retirement accounts to maximize income tax efficiency, protect assets for beneficiaries, and integrate these accounts into your overall estate plan. At Boyd & Boyd, P.C., we help clients preserve retirement savings, reduce taxes, and ensure wealth is transferred in a way that honors their intentions.
Q2: How are retirement accounts treated at death?
A: Retirement accounts such as IRAs and 401(k)s pass according to beneficiary designations, not your will or trust (unless the trust is named as beneficiary). Without proper planning, beneficiaries may face substantial income taxes — especially under the new 10-year rule imposed by the SECURE Act. We help clients design beneficiary strategies that minimize tax burdens and maximize family benefits.
Q3: What is the SECURE Act and how did it change inherited IRAs?
A: The SECURE Act (passed in 2019) eliminated the “stretch IRA” for most non-spouse beneficiaries. Now, most beneficiaries must withdraw the entire account within 10 years of the original owner’s death, accelerating income taxes. Careful planning, including use of retirement trusts and timing strategies, can help reduce the impact.
Q4: Can I name a trust as the beneficiary of my retirement account?
A: Yes — and in many cases, it’s advisable. Naming a specially designed trust (commonly called a “Retirement Trust” or “Standalone Retirement Trust”) can:
- Protect beneficiaries from creditors and divorces
- Control the timing and use of distributions
- Preserve government benefits for disabled beneficiaries
Boyd & Boyd, P.C. designs and drafts specialized retirement trusts that meet strict IRS rules and achieve your wealth protection goals.
Q5: How can Boyd & Boyd, P.C. help with retirement asset planning?
A: We integrate retirement account planning into your broader estate and wealth protection strategies. Our firm helps you:
- Review and update beneficiary designations
- Minimize income tax on inherited retirement assets
- Protect inherited accounts from creditors and divorces
- Coordinate retirement planning with trusts and gifting strategies
Should Ask Questions (SAQs)
Q1: What’s the risk of leaving retirement accounts outright to my children?
A: Leaving retirement accounts directly to beneficiaries often results in quick withdrawals, poor tax planning, exposure to creditors or divorces, and loss of future growth potential. Naming a Retirement Trust can provide structured protection while still giving heirs access when needed.
Q2: Can a charitable strategy benefit my retirement asset planning?
A: Absolutely. Using charitable remainder trusts (CRTs) or naming charities as partial beneficiaries of retirement accounts can create income tax deductions, provide lifetime income for heirs, and reduce estate and income taxes. We help clients design charitable strategies that align with their personal and financial goals.
Q3: How do Roth IRAs fit into retirement planning?
A: Roth IRAs can be powerful tools because qualified distributions are tax-free, and inherited Roth IRAs offer 10 years of tax-free growth for heirs. We help clients assess whether strategic Roth conversions during life make sense as part of their retirement and estate tax planning.
Q4: What happens if I don’t update my beneficiary designations?
A: Outdated beneficiary designations can result in unintended outcomes, such as leaving assets to an ex-spouse, disinheriting children, or triggering avoidable taxes. At Boyd & Boyd, P.C., we ensure your beneficiary designations are reviewed and coordinated with your overall plan.
Q5: How often should I review my retirement asset planning?
A: Retirement asset planning should be reviewed annually, or after major life changes such as marriage, divorce, births, deaths, or tax law updates. We help clients keep plans current so their retirement savings are always protected and aligned with their wishes.
Your retirement savings deserve protection — now and for generations to come.
Schedule a confidential consultation with Boyd & Boyd, P.C. to ensure your retirement accounts are structured to maximize value and minimize taxes.
Book Your Retirement Asset Planning Consultation or Request Our Free Retirement Asset Planning Guide.
