What you need to know about estate planning with IRAs

Estate planning with IRA can create a reliable form of protection and security, but you need to make sure that it is properly configured. When it comes to estate planning, the number one goal is to make sure your loved ones are protected if something happens to you.

Believe me, if anything happens to you, they will have enough problems to fix. Do not let them worry about what happens to the hard-earned IRA funds you&39;ve accumulated over the years. If you make sure to set up your IRA

correctly now, you will save them from most of the trouble that might occur if they did not happen properly.

When planning an estate with IRAs, you need to worry about two taxes. The first is the income tax, which we all know. The second is the inheritance tax, sometimes called the inheritance tax. This amount varies from state to state.

Know that saving too much money in your IRA can prove to be a disadvantage. Taking into account the value of your home and the value of other real estate, the value of your estate must be less than the applicable exclusion amount, which is currently $ 2 million. If this is not the case, your beneficiary may have to pay up to 50% of the amount in taxes. Incredible, no? But that&39;s true …

That&39;s why it&39;s so important to ensure that your estate planning with IRA properly follows the proper rules that surround your overall plan. Also make sure that the beneficiary is indicated when the account is first opened and is

continuously updated as it is passed from heir to heir. Be sure to consult a lawyer or real estate planner to learn more about the rules and regulations applicable to your situation.

Another great way to proceed with estate planning with IRAs is to use a Roth IRA. A Roth IRA is the one where contributions are made with after tax dollars. This differs from a traditional IRA, which uses pre-tax dollars as contributions (which are also tax deductible). In addition, with a Roth IRA, the funds you put on the account, as well as any profits or gains, are never again taxed by the federal government.