IRAs and 401ks allow your savings to grow tax-deferred until you begin taking money out. In most cases, you must begin taking required minimum distributions at age 72. The remainder of your account continues to grow tax-deferred. If you pass away before depleting your account, the balance is paid to your named beneficiaries. A surviving spouse may roll over the account into his or her IRA. In most cases, a non-spouse individual beneficiary must pay the taxes on the account within 10 years. Several problems could develop if you name an individual beneficiary. Planning for tax-deferred accounts is difficult. Depending on your specific facts, it may be best to leave them outright, to a trust created under your Will or revocable trust or to a separate trust designed only to hold these accounts. We can help you evaluate these options.
