Qualified Retirement Plans (QRPs) present some of the most complicated tax and non-tax planning challenges of any asset in an estate, especially for married couples. The failure to make proper Life & Estate Plans for your QRP can unnecessarily enrich the IRS and disinherit loved ones.
For many Americans, a significant portion of their estate value is in QRPs. This remains true despite the inevitable ups and downs of the stock market. One reason QRPs weather economic storms better than non-qualified investments is their unique tax treatment. All contributions to QRPs are made with pre-tax dollars and all of the growth inside such plans is tax-deferred until withdrawn. Hence, contributions to QRPs not only reduce your current income tax liability, but they grow with compound interest and without the barnacles of annual income taxation.
But how, when and to whom these assets pass after your death will determine how much of your hard-earned assets disappear to taxation. Without proper planning, these assets can evaporate into unnecessary taxes at an alarming rate. If you are concerned about what plans should be made for your QRP assets, please call our to review your specific situation.