Estate Planning Focus - Fall 2009
The FDIC insurance amount of $250,000 on interest-bearing deposit accounts will remain in place until December 31, 2013. You do not need to do anything to receive this coverage.
Rolling Over 2009 Minimum Required Distributions
In addition to the waiver of Required Minimum Distributions ("RMD") for 2009, the IRS recently announced that those who have taken an RMD from their IRA or qualified plan in 2009 have the opportunity to roll the RMD back into a retirement plan.
In general, an individual who has received a Required Minimum Distribution in 2009 has until the later of November 30, 2009, or 60 days after the date the distribution was received, to roll over the distribution.
However, for RMDs from an IRA, only one distribution from the IRA is eligible for this relief if the RMD is rolled into a traditional IRA. Conversions to a Roth IRA are not limited to the one-per-year rule.
RMD distributions from a qualified plan are eligible for rollover as long as they equal or are less than the participant's 2009 RMD, or are one or more payments in a series calculated to last for the Participant's (or Participant and Designated Beneficiary's) lifetime.
If you have questions about the ability to roll over a 2009 RMD, contact your WNJ attorney.
I WAS WONDERING
My banker has recommended that I name a beneficiary on my accounts. Is this a good idea?
The benefit of naming a beneficiary is that, during your lifetime, the beneficiary does not have rights to the account as is generally true with a joint owner. Also, at death, the account passes to your beneficiary without going through probate.
The difficulty with beneficiary designations is that you may depriving your estate or trust from funds needed to pay expenses. Additionally, the beneficiary designation may or may not match the terms of your will or trust. The use of beneficiary designations should be analyzed in light of the terms of your estate planning documents.
If I have a trust, how do I know what's in it?
It depends on the type of asset. Financial accounts (bank and brokerage) should have trust language on the statement. If life insurance is to be payable to the trust, you will need to confirm with the life insurance company that their records reflect the trust as beneficiary. For real estate, you will want to check the last deed of record with the Register of Deeds. Tax statements are not always accurate.
What is in the trust depends on the actions you have taken to put assets into the trust. Ownership and beneficiary designations should be regularly reviewed.
'I Was Wondering' gives readers an opportunity to ask questions of our T&E attorneys. Not all questions will be answered publicly. To submit a question, please send it by e-mail to Lori Tuttle Measure at email@example.com.