Multi Generational Ira Definition

Second generation ira or multi generational ira.

Multi generational ira definition. She has 300 000 of retirement assets in three employer sponsored retirement plans and two iras. An ira can be too much of a good thing if your children inherit the taxes as well as the money. Alice who s 60 years old and ready to retire. Trusts set up as asset protection trusts along with bloodline beneficiary and multi generational dynasty trust features will generally address all of a client s estate planning needs.

This allows the named beneficiary after the remaining spouse to continue the tax deferral of the ira over their remaining life expectancy. The stretch ira to the rescue. A multi generational ira is an individual retirement arrangement that is advantageous not only to first generation beneficiaries upon the account holder s death but also to subsequent heirs who. Through proper planning our attorneys can help spread out the distribution and minimize the tax burden on your children or avoid the tax avalanche altogether by setting aside funds in a trust for the following generation.

These iras also are also called stretch iras legacy iras or eternal iras. A multi generational ira is an individual retirement account that allows you to leave the money to beneficiaries after your death. Fortunately in the tax code there is another option available which is known as the stretch or multi generational ira. To illustrate how a multi generational ira strategy works consider.

Long term investment strategy instead of receiving disbursements from your ira when you turn 70 1 2 as required a stretch ira names your children or grandchildren as the beneficiaries. Multi generational iras which are also known as stretch iras apply that principle but look at a longer time frame naming a child as a beneficiary. The multi generational distribution will use each generation of beneficiaries separate life expectancy verses the first beneficiary s life expectancy. Like corporations and limited liability companies trusts can provide excellent protection for clients and their assets and should be freely used for this.

In other words it allows you to pass your ira to a beneficiary down a generation or even several generations to your grandchildren.