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Kyle Wynn & Associates, PLLC


Pension Protection Act of 2006 Makes the IRA Inheritance Trust® Even Better!

The Pension Protection Act (PPA) significantly widened the application of the IRA Inheritance Trust® to people who may never have considered this valuable planning tool before.

Previously, this Trust had no application to a company retirement plan - - 401(k), 403(a), 403(b), 457, pension or profit-sharing plan, etc. - - unless and until the worker/participant reached normal retirement age and took an “in service” distribution or retired, and then rolled over the company plan into an IRA.   The reason why is that company plans’ own rules usually forced a non-spouse beneficiary to take the entire taxable distribution in 1 to 5 years, overriding the income tax “stretchout” rules available to IRAs.

Now, if someone has retirement money in company plans, is still working but has not reached normal retirement age, or has retired but left these moneys in the company plan, this plan participant can take advantage of the stretchout and protection benefits for his or her family available through the IRA Inheritance Trust®.

The PPA permits non-spouse beneficiaries of company plans, or a Trust established on the beneficiaries’ behalf, to do a rollover into an “inherited IRA” (which is not protected from their creditors) after the plan participant passes away. In other words, a company plan participant can set up the IRA Inheritance Trust® now, make it the beneficiary of the plan, and let the IRA rollover occur later!

If you haven’t seriously considered the IRA Inheritance Trust® because you are still working or have retired but still have money in a company retirement plan, you definitely need to look into it right away!