Orange County California

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What are the Distribution Options for an IRA Beneficiary-Explained by Orange County Estate Planning Attorney James F. Roberts

What Are The Distribution Options for an IRA Beneficiary

Let’s assume you have $300k in your IRA, which is likely because you rolled over a 401k into an IRA. And let’s assume that at the time of your passing you have three children. Let’s discuss the options for how the children pay the tax on the $300K. I discussed in an earlier video that only a spouse can roll over an IRA into their own IRA.

There are three Distribution Options for an IRA beneficiary who is not a spouse.

How they take the funds has tax consequences for each option.

  1. Option 1 is a Lump Sum
  2. Option 2 is a 5 year period
  3. Option 3 is a lifetime distribution

While you do not have the ability to make this choice for your beneficiaries it may be a great conversation to have with your loved ones at some point. We have a lot of resources about having family conversations and we invite you to schedule an appointment or to attend one of our annual family days events to help you and your beneficiaries make the best decisions possible. Contact us today and set up an appointment.

We offer a many different resources and pamphlets on the subject of creating, updating and implementing estate plans. We also offer a regularly scheduled seminar in our office to help people determine what the best options are for them in their estate planning needs. We hope you sign up for one of our seminars to help you find your best options. We regularly conduct free seminars designed to teach about the benefits of creating an estate plan. The seminars are held on-site at our Anaheim office inside of our “classroom”. We offer light snacks and refreshments to the attendees and the group is often small and intimate, which allows for questions to be asked comfortably and for a very relaxed environment. Please encourage your loved ones to attend the seminar so that they may learn more about the estate planning process and benefits.

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