It is possible to leave IRAs, 401ks, and other qualified plans to beneficiaries upon death. If done correctly, it is possible to avoid substantial portions of income and other various taxes. When placed in a trust, an initial $500,000 distribution from a qualified plan can pay out $1.5 million over a beneficiary’s lifetime. The assets from the qualified plan are not taxed when rolled over to the trust, but only when distributed to the beneficiary of the trust. This type of planning can be complex and it is best to seek professional advice for help.
See George, A Short Story of Jack, The Beanstalk and Survivor IRAs, Fox+Mattson, June 19, 2017.
