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To ensure compliance with the requirements imposed on us by IRS Circular 230 (31 C.F.R. 10.33 – 10.37, et. Seq.), we inform you that to the extent the information on this page mentions any federal tax matter, it is not intended or written and cannot be used, for the purpose of avoiding Federal Tax penalties.

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Monday, May 20, 2013

Consider a Stand Alone IRA Accumulation Trust

For clients with large IRA accounts, making sure that your beneficiaries are able to "stretch-out" the recognition of taxable income for as long a period of time as possible has been a popular goal. Unfortunately, when your beneficiaries have the opportunity, many choose to withdraw the funds, thus creating a taxable event in the year of distribution. If the entire IRA is withdrawn, the tax consequences can be horrendous.

The solution: create a stand alone IRA accumulation trust to protect your beneficiaries from making that costly mistake. This trust is designed to comply with all requirements to make the trust a "qualified beneficiary" under tax laws. In addition, you may control the use of the funds by virtue of custom dispositive provisions in the trust. For more information, and to see if this strategy fits your needs, call my office at 847-955-9000.