Keep Your Ira In Your Family

IRA Beneficiary Designations— The Gaping Hole Jim and Rita had been married for 35 years when Jim passed away with a $700,000 IRA account which he left to Rita, as primary beneficiary. At the recommendation of her accountant and her financial advisor, Rita assumed ownership of the IRA and named the couple’s three children as beneficiaries of the account after Rita’s death. Several years later, Rita married Phil, who had recently lost his first wife and had children from his first marriage. During the next few years, Phil gradually took over management

Could your IRA actually be diverted to strangers after you and your present spouse have died? of all of Rita’s finances, and ultimately convinced her to name him as primary beneficiary of the IRA at her death. He assured her that her children would get what was left after Phil’s death, if he outlived Rita. As it turned out, Phil did outlive Rita. After her death, Phil rolled Rita’s (formerly Jim’s) IRA account into his own, with Phil’s children from his first marriage as beneficiaries. So when Phil passed away, his children took distribution of all of the IRA...and Jim and Rita’s own children ended up with none of it. Is this legal? Yes, it is. Has it ever happened? Yes, absolutely. Could your IRA actually be diverted to strangers

after you and your present spouse have died? Yes it could. In our experience this ga ping h o l e in married couples’ estate planning is Joseph S. Karp, rarely adC.E.L.A. dressed, even when the final destination of an IRA of $1 million or more is at stake. To protect your ultimate beneficiaries, we recommend the creation of an Interspousal IRA Agreement designed to protect your children or other agreed-on individuals, as the remainder beneficiaries of the IRA, after you and your spouse have died. Call The Karp Law Firm and we can advise you.

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Listen to Joe Karp with Anita Finley on Saturday, January 12 from 7:30-8:00AM on WSBR 740AM and on the Internet at www.wsbrradio.com.

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Joseph S. Karp is a nationally certified and Florida Bar-certified elder law attorney (C.E.L.A.) specializing in the practice of Trusts, Estates and Elder Law. His offices are located at 2500 Quantum Lakes Drive, Boynton Beach; 2875 PGA Blvd., Palm Beach Gardens; and 1100 SW St. Lucie W. Blvd., Port St. Lucie. Call him at 561-752-4550 (Boynton); 561-625-1100 (Palm Beach Gardens); or 772-343-8411 (Port St. Lucie). Toll-free from anywhere: 800-893-9911. E-mail: KLF@ Karplaw.com. or website www.karplaw.com