Retirement Plans Archives - Timins Law Group

Your Inherited IRA Just Got Nerfed

Posted on December 30, 2019

Every few years the federal government passes last-minute legislation that totally messes up your estate plan. On December 20, 2019 President Trump signed Congress’s “Setting Every Community Up for Retirement Enhancement Act of 2019” into law. On top of the fact the government paid a 12 year old to sell the rights to his treehouse password in order to create a nitwitty acronym, the “SECURE Act” makes radical changes to how your post-mortem beneficiaries receive your retirement plans that might actually make you feel less secure. When your parent, family or friend dies and leaves you their IRA account you use to receive an “Inherited IRA”, meaning the original owner’s name remained on the account, but the account was change

3 Times Your Retirement Plan is Not Protected from Creditors

Posted on April 4, 2017

Many people know that IRAs and 401(k) plans have creditor protection. However, most people do not know the limits of that creditor protection. It may come as an unwelcome surprise, but if someone is suing you: (1) if you owe money to the IRS or to an ex-spouse, (2) if your retirement plan is of a certain type, or (3) if your beneficiaries are under creditor attack, your retirement funds may not be protected at all. First, if you owe tax dollars to the IRS, or are late on alimony or child support payments, your retirement plan is almost never a safe haven. The IRS, an ex-spouse, and minor children act as “super creditor” against your retirement plans. Ex-spouses

Naming Beneficiaries: When to Start (and Stop) Asking “What If?”

Posted on February 17, 2017

My mentor was a meticulous, forward-thinking attorney. When she retired from private practice I succeeded her and took over her client files. As a result, I had the pleasure of reading many of the wills she had drafted (not a recommended activity for narcoleptics who don’t want to fall asleep). She was absolutely scrupulous when it came to naming contingent beneficiaries to an estate. For some of her clients, and indeed for me too at times, it seemed like a maddening process. Here is a common scenario: I imagine going to an attorney to draft my Will, create beneficiary designation forms, and consider creating a trust. Now comes the moment of truth: When I pass away, who gets what?

On-Going Planning: Generic Estate Plans Still Create Unique Post-Mortem Issues

Posted on October 16, 2015

Your estate plan is generic. I can almost guarantee it. Sure, perhaps 1% of people have something original, fantastic and truly thoughtful created for them, but (much like movie plots) there are somewhere between 9 and 14 standard estate plans out there for 99% of the population. That is because only .25% of us are truly wealthy enough to justify non-traditional planning, and .75% have the actual need for original content. Congratulations: You are normal. When you die, however, your estate is unique, special, its own miracle or monster. You have accounts at different financial institutions than everyone else, you leave behind a family with different relations, health concerns and creditor issues than everyone else, and leave assets to certain

Why ITF & TOD Accounts Are Better Ways of Transferring Assets Than Using a Will

Posted on August 8, 2015

Many financial institutions offer the account holder a choice of establishing a bank account as an “In Trust For” account and an investment account as a “Transfer on Death” account. For example, my bank account statement may say “Daniel Timins I.T.F. Barack Obama” or my investment account may be titled “Daniel Timins T.O.D. Herman Munster.” My personal choice of beneficiaries aside, while seeing these words on a statement may be a bit unnerving, there are huge post-mortem benefits to having ITF and TOD accounts: The accounts are solely under my control during my life (the beneficiary doesn’t even get statements during my life) They are revocable Upon my passing my beneficiary merely needs to show up at the bank with

2014 IN REVIEW

Posted on December 23, 2014

Happy Holidays and New Year! I hope this letter finds you in good spirits. 2014 was a very busy year in the Trusts & Estates and Elder Law field. Most of my predictions were wrong (again). I tend to err on the side of caution, however, so when I am wrong my clients typically win. Please allow me to share some legal highlights of this past year with you, and some professional insights as to how 2015 may look in the Trusts & Estates and Elder Law arena: THE BAD NEWS: INHERITED IRA CHANGE: BENEFICIARIES NO LONGER PROTECTED Issue: In the past, your IRA and other retirement plans were protected from creditors, with the exception of a spouse whom you

Your “Inherited IRA” is No Longer Safe

Posted on November 17, 2014

Individual Retirement Accounts are perhaps your most safeguarded and income tax-efficient asset: are deducted from your adjusted gross income for income tax purposes, principal grows tax deferred, and the account is protected from just about any creditor other than a spouse (even in bankruptcy and against lawsuits). At least that was the case until 2014. When a person passes away with an IRA, any beneficiary may take all funds out of the existing IRA as long as they do so within five years. This means all IRA assets are distributed quickly, negating long-term tax deferral and assessing income tax payments on the large distributions. And all funds are now out of the IRA, so they are no longer protected. A