Leaving a Stretched Florida IRA to a Beneficiary

Posted on Jan 26, 2012
If your financial portfolio includes an IRA and you have no plans to deplete it, it's very important that you name a beneficiary.  Your IRA can be advantageous to beneficiaries, whether it's a Roth or traditional IRA, according an article at Forbes.com. However, specific guidelines will need to be followed to bypass significant taxes and have funds available for your beneficiary's lifetime.

To make this a reality, you should schedule a consultation with an experienced Fort Myers estate planning attorney. When your beneficiary inherits the IRA, the key is not to roll it over or move it in any other manner. 

It will need to be re-titled with the names of the deceased and the beneficiary. With this "stretch IRA," your beneficiary cannot withdraw money in a lump sum; money can be withdrawn in increments over the beneficiary's lifetime.

Required minimum distribution (RMD) withdrawals are required to start December 31 on the year following the inheritance of the IRA. Although they are taxable, the amount is much less than what would be taken from a lump sum.

Since the stretch IRA is supposed to last a lifetime, you can calculate your life expectancy, based on IRS standards, and divide your IRA balance by those years to get your RMD.

Help from a Fort Myers Estate Planning Attorney is Just a Phone Call Away

Fort Myers probate attorney Matthew A. Linde understands firsthand the importance of careful estate planning and the complexities of financial legal matters, such as probate, tax litigation and guardianship. For help with your probate concerns, contact our Fort Myers office to schedule a one-on-one meeting with a professional who can answer your questions – 239-939-7100 or 844-764-5492.