Tax Preparedness Quiz (please circle each statement you can honestly agree with)
1. My financial advisor has advised me that my children/heirs will have to pay income taxes on my IRA, and that can be as much as 50%. 2. I think income taxes, property taxes, and all other fees and taxes will be higher in the future. 3. I have a copy of the beneficiary designation form for each of my IRAs in the files at home for my executor. 4. I understand the difference between “Per Stirpes” vs. “Per Capita” beneficiary designations. 5. I understand that even if I understand the tax laws, at the point where this knowledge becomes useful, I may not be around to tell anybody. 6. I have reviewed IRS sections 7202 and 590 and the requirements to avoid immediate inheritance income taxes with my children/heirs. 7. I understand that my living trust does not protect my children/heirs from inheritance income taxes on my retirement accounts. 8. I have reviewed the use of disclaimers and have properly named beneficiaries so as to leave my heirs the flexibility to plan within their own families. 9. I have created a family IRA estate distribution plan and instructions for my family that is separate from my living trust, which lays out all the requirements of IRS section 7202 and section 590 and the prior methods to avoid immediate taxation of my IRA. 10. I understand that naming a living trust as the beneficiary of an IRA or other retirement accounts in almost all cases, can create a substantial loss of tax benefits for my heirs. 11. I understand that a ROTH IRA can grow Tax-Free over the lives of my children/heirs and does not have to be cashed out. 12. My attorney looked at my retirement account beneficiary designations to be sure they were done correctly.
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