The answer is very simple. If your investment account is titled in your name, then you need to do more planning because:
1. If there is a claim against you, your creditors can reach the account.
2. If your estate grows above the estate tax
exemption level, it will owe a 40% estate tax at death.
The bottom line: Nothing should be titled in your name, with a few exceptions (such as retirement accounts). Instead, your accounts should be titled as an entity such as a limited partnership, and the entity should be owned by trusts that benefit you and your family.
What about retirement accounts? Although they have to be in your name, take a look at the beneficiary designation. If you name individuals as the beneficiary of your retirement accounts, the assets may be exposed to their creditors, divorces, and estate tax. The beneficiary of retirement accounts should be a trust with special retirement provisions.
If your accounts are in your name, or if your retirement beneficiary names individuals, you may need to do more planning. Contact us if you'd like to discuss how we can help.
Marvin E. Blum
