Many CPAs and accounting professionals provide advice to clients on the virtues of investing in long-term IRAs. But how do you explain the tax ramifications for heirs to an estate in plain-speak?
Some measures can be implemented to prevent Federal estate tax, and Federal and state income taxes from taking up to 75 percent of investments. Most of the safeguards are embedded in distributions, and the length of time after the owner's death in which beneficiaries can keep the tax-shelter going.
There are many scenarios to review, such as putting the IRA in a trust, or designating a benefiary other than a husband or wife.
The choices are many, and the financial advisor will want to bone up on the latest trends.