Inherited IRAs: Pitfalls and Opportunities

David Strachan of Cambridge Trust speaks to ECEPC members about protecting one of their client’s most important assets

“When you thECEPC-StrachanMarch2016ink about estate planning these days, people’s retirement plans are some of their largest assets,” said David Strachan, Senior Vice President and Trust Officer of Cambridge Trust Company.

Strachan spoke to the Essex County Estate Planning Council at a March 22 breakfast meeting at Spinelli’s in Lynnfield, sponsored by Care Dimensions and Aberdeen Home Care, Inc. His topic was inherited IRAs and the opportunities and potential liabilities they can present.

Strachan, who serves as treasurer of the ECEPC, discussed the nuances and options – of which there are many – of inherited IRAs. The distribution rules vary greatly depending on the beneficiary, and at what time the owner of the IRA dies, either prior to or after the Required Beginning Date.

But that’s not all. There are numerous rules and requirements based on other differences in how an IRA is established. Strachan talked about spousal and non-spousal IRAs, minimum required distributions and varying payout options, penalties for excess accumulations, IRAs with multiple beneficiaries, trusts as IRA beneficiaries and much more, proving that IRA planning is a process requiring expert planning and thought. He outlined several specific scenarios where payout options can vary by thousands of dollars.

“In our firm, we’re putting teams around our clients to help them make these really important decisions,” said Strachan. “I really think that this is what all the people in this room do.”

Because of the complexity of IRA planning, over 40 ECEPC members and their guests were in attendance to learn more about the topic and ask questions that sparked a lively discussion among attendees.

“This is why putting a team around your client is so important,” said Strachan. “It’s really important to preserve and protect one of your client’s most important assets and legacies.”

Sponsor News

Elizabeth Macomber, vice president of philanthropy at Care Dimensions, the ECEPC’s Elite Annual Sponsor, told ECEPC members at the March 22 meeting that the organization has broken ground on a new inpatient hospice facility on Winter Street on the Lincoln/Waltham line. The 18-bed facility is expected to open in 2017.

Joanne MacInnis, president of Aberdeen Home Care, Inc., the March 22 event sponsor, shared that Aberdeen has purchased and moved into a spacious office building on Cherry Street in Danvers. Joanne will be presenting on Emergency End of Life Plans for Clients at a May 17 breakfast meeting at Spinelli’s.





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