Archive for the ‘IRA Beneficiaries’ category

Beware! Estate Planning for Second Marriages Can Be Tricky.

March 8, 2012

The following was recently published in my “Ask the Lawyer” column:

Question:   I just got remarried and both my husband and I have children from previous marriages. I am worried that my son and daughter won’t get anything if I die first.

Answer:   You must take special care to plan if you are in a second marriage because of the complex relationships between step-parents and step-children. We see two common problems: (1) you add your husband’s name on the house and bank accounts, and if you die first he gets everything, and your children get nothing; or (2) you leave everything to your children, and your husband gets nothing (if you can believe it, we have had kids evict their mom’s husband from the house after their mom died). One other thing, your husband has inheritance rights to your assets even if you have a Will leaving everything to your children (this is called “spousal election”). We have special “Second Marriage Estate Planning Worksheet” to help you and your husband work through these issues (yes, there are solutions, and they result in taking care of your husband and your children, which is what most people want). If you would like our free Worksheet, please email me at or call me at (517) 548-7400.


Michigan Estate Planning – Who Should Be The Beneficiary Of Your IRA? Part 1

February 25, 2010

How would you like to turn your modest tax-deferred account into millions for your family? Depending on whom you name as beneficiary, you can keep this money growing tax-deferred for not only your and your spouse’s lifetimes, but also for your children’s or grandchildren’s lifetimes. That can turn even a modest inheritance into millions.

When preparing your estate plan, you should take some extra time to analyze your beneficiary designations and coordinate them with your overall estate plan.  You have five basic options as beneficiaries: Your spouse (if married); your children, grandchildren or other individuals; a trust; a charity; or some combination of the above. 

Over the next few weeks, I will talk about these options and discuss the advantages and disadvantages of each.

But let’s start with some IRA basics.  When you reach a certain age, usually April 1 after you are 70 1/2, Uncle Sam says you must start taking some money out. (This is called your required beginning date.)  But if you do not use all this money before you die, naming the right beneficiary can keep it growing tax-deferred for decades.

Calculating the amount you must withdraw each year (your required minimum distribution) is much easier now than it used to be.  Each year, you divide the year-end value of your account by a life expectancy divisor from the Uniform Lifetime Table (provided by the IRS). The result is the minimum you must withdraw for that year.  You can always take out more.  For example, the divisor at age 70 is 27.4. If your year-end account balance is $100,000, you divide $100,000 by 27.4, making your first required minimum distribution $3,650. Each year the divisor is smaller, but it never goes to zero.

Stay tuned for Part 2:  Next up is the discussion of the advantages and disadvantages of IRA spousal rollovers.