Anytime there is a marriage, death, divorce, or birth of a child or grandchild, it is important to review existing beneficiary designations to avoid the possibility that someone other than the account owner’s intended beneficiary will receive their retirement funds.

While a QTIP Trust is a great way to defer incurring federal estate taxes until the surviving spouse dies, that device is also highly limiting in how the surviving spouse can plan his/her own estate when the QTIP Trust assets will be included in the survivor’s taxable estate.

In its final required minimum distribution (RMD) regulations, the IRS confirmed that if the deceased IRA owner was over his/her required beginning date (RBD) at the time of his/her death, the beneficiary of that inherited IRA must take annual RMDs over the 10 years that follow the IRA owner’s death.

The Tax Code’s ‘at least as rapidly rule’ creates some surprises when it comes to the need to take annual required minimum distributions from an inherited IRA.

Yet another federal court has held the Corporate Transparency Act (CTA) to probably be unconstitutional. There has been a flurry of activity in the federal courts in the past few weeks leading to a nationwide injunction against the enforcement of the Corporate Transparency Act (CTA.) Career Colls. & Schools of Texas v Department of Education, 98 F.4th 220 (Fifth Circuit Court of Appeals, December 2024.) Yet another federal District Court, also from Texas, chimed in last week to also enter a nationwide injunction against the CTA.

A surviving spouse who inherits their deceased spouse’s IRA can continue that inherited IRA (not roll it over) and gain some new benefits.

There is one way in which to separate the cream from the coffee if an individual’s goal is to roll over funds from a traditional IRA to a Roth IRA and not incur any income tax on the rollover.

In the past we have touched on the creative planning that can arise using a beneficiary deemed owner trust, or BDOT. This missive will address how such a classification might be used in conjunction with a qualified terminable interest property trust, or QTIP Trust. With a successful BDOT the primary beneficiary of the Trust is the owner of the Trust’s assets for federal income tax purposes.

Many qualified plan sponsors are now adding a Roth 401(k) feature to their basic 401(k) plan. That feature makes it easier for a younger plan participant to convert their basic 401(k) account to a Roth 401(k) account and enjoy tax-free earnings on that account. Despite the benefits of such an in-plan conversion, there are a couple of drawbacks that need to be considered before an in-plan Roth 401(k) conversion takes place.

Individuals who are considering a move to an assisted living environment might also consider making a Roth IRA conversion at the same time to avoid paying any income taxes on the Roth conversion.