During your lifetime, your retirement accounts enjoy asset protection, meaning that they are not available to creditors to collect on. But as soon as you pass that account to a loved one as part of your estate, that protection evaporates. This means one lawsuit and POOF! Your life long, hard earned savings could be gone.

Fortunately, there is an answer. A special trust called a “Standalone Retirement Trust” (SRT) can protect inherited assets from your beneficiaries’ creditors. What does that mean?

When your spouse, child, or other loved one inherits your retirement account, their creditors have the power to seize it and take it as their own if, for example, your loved ones declare bankruptcy.

Here are five scenarios in which creating a special plan for your retirement accounts in your overall estate plan can make sense:

  1. You have substantial combined retirement plans. Spouses can use an SRT to shield one or the other from creditors.
  2. You believe your beneficiary may be “less than frugal” with the funds. Anyone concerned about how their beneficiary will spend the inheritance should absolutely consider an SRT as you can provide oversight and instruction on how much they receive – and when.
  3. You are concerned about lawsuits, divorce, or other possible legal actions. If your beneficiary is part of a lawsuit, is about to divorce, file for bankruptcy, or is involved in any type of legal action, an SRT can protect the assets they inherit from those creditors.
  4. You have beneficiaries who receive assistance. If one of your beneficiaries receives, or may qualify for, a need-based governmental assistance program, it’s important to know that inheriting from an IRA may cause them to lose those benefits. An SRT can avoid disqualification.
  5. You are remarried with children from a previous marriage. If you are remarried and have children from a previous marriage, your spouse could intentionally (or even unintentionally) disinherit your children. You can avoid this by naming the spouse as a lifetime beneficiary of the trust and then having assets pass onto your children after his or her death.

You’ve Worked Hard To Protect & Grow Your Wealth – Let’s Keep It That Way

You worked hard to save the money in those retirement accounts and your beneficiaries’ creditors shouldn’t be able take it from them. Let us show you how an SRT can help you protect your assets as well as provide tax deferred growth. The best time is now.