During our workshop, I mentioned Ed Slott a few times.  Ed is probably the most well-known IRA expert in the country.  I’ve had the pleasure of breaking bread with Ed several times over the past ten years and enjoy not only his huge reservoir of IRA knowledge but his keen sense of humor.  Rarely does a weekend go by that Slott isn’t quoted in either The Wall Street Journal, Barron’s or one of the numerous investment rags I read religiously.

In a column Ed wrote in Investment News last year (read article here), he says “no one is a bigger fan of the so called ‘stretch IRA’ than me” and goes on to say “I’ve been touting its benefits for over 20 years.”  But then he goes on to state the three reasons it makes sense to replace the stretch IRA with life insurance… if you are insurable.

Here are the three reasons he feels life insurance has big advantages over the stretch IRA:

1.Life insurance distributions to beneficiaries are tax free
2.Life insurance is not subject to required minimum distribution (RMD) rules
3.Life insurance is not buried with complicated tax rules

Whether you leave an IRA or a life insurance policy, setting up a trust often makes sense to protect these assets from falling out of the bloodlines.  For those that choose to transition IRAs to Life Insurance, setting up a trust is easy and will protect this tax-free inheritance.

If you’re having trouble wrapping your arms around life insurance or are not insurable, setting up an IRA Inheritance Trust is key to insuring your heirs don’t make mistakes that end up causing huge tax bills while also ensuring that your lifetime of savings do not fall into a son-in-law or daughter-in-laws hands verses your grandkids once your child dies.

I hope we gave you a lot to consider last night.  As you digest it all, and have questions, give us a call.  I can help you decide if life insurance makes sense for you while Jeremy will help you figure out if a trust is appropriate.  Reach out to the crew you met last night – Anne at [email protected] and Jaime at [email protected] – to match up calendars.