The top five things practitioners need to know about IRAs now: a discussion of state law, case law, and other considerations.
Florida Bar Journal › Vol. 78 Nbr. 7, July 2004
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Summary
Individual retirement accounts
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The top five things practitioners need to know about IRAs now: a discussion of state law, case law, and other considerations.
It is important to recognize the significance of retirement accounts and examine some of the nuances that prevent them from being just another product of the Internal Revenue Code.
********** Individual retirement accounts (IRAs) are most often thought of as tax-deferred accounts that the government conjured up in the 1980s to encourage Americans to save for retirement. With almost $10 trillion in tax-deferred retirement accounts, $2.5 trillion of which is estimated to be held in IRAs, they have become an estate and tax planning force to be reckoned with. (1) According to the Employee Benefits Research Institute, over 90 percent of all households in America have some sort of financial account, and of those households surveyed, retirement accounts were second in popularity only to transactional accounts such as checking and savings accounts. (2) It is important to recognize the significance of these accounts and perhaps examine some of the nuances that prevent them from being just another product of the Internal Revenue Code, since it is likely under current tax law that a generous portion of the approximate $7.5 trillion that are in non-IRA retirement accounts will eventually be rolled into IRAs at some point in the future. It is also important to recognize that every state has enacted laws that touch the world of IRA administration, that must be considered together with case law that sometimes seems to have little to do with statutes or the Internal Revenue Code. Additionally, each IRA trustee and custodian may also limit the options available to the IRA owner or beneficiary by contract. Sometimes the interaction of all of these elements can have a surprising impact on the ultimate disposition of these accounts. The focus of this article ...See the full content of this document
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