Question for estate planners

[Floogeldy]

My question concerns 401ks and Roth IRAs.

What is the best way to handle these in the context of estate planning? A will, trust, etc. . . . . ? Joint tenancy?

I know they have named beneficiaries, so does that mean they aren't part of a deceased's estate (other than probably estate tax purposes)?

What does federal law allow?

Thanks in advance,

Floog

[ET Awful]

1. Haven't worked in estate planning in many years, but my

first instinct is that a trust should be created and named as beneficiary of both plans.

I couldn't say for sure though.

[Floogeldy]

2. That sounds reasonable

But I wonder if the Feds allow that, since the funds haven't been taxed yet?

[ET Awful]

3. They have in the past.

I forget what the cap is these days, but it used to be that ANYTHING you left under 1.2 million for a couple (or 600,000 for each individual) was not taxed for estate tax purposes anyway.

That cap was actually scheduled to increase as part of the Omnibus Tax Reconciliation Act of 1995 (if I'm not mistaken), and would have resulted (once again, if memory serves), in a 1 million dollar exemption for each individual.

The laws change frequently though, and like I said, I haven't been around it in a while (in '96 or so was the last estate planning work I did).

BTW, I should add a disclaimer that I'm not attorney, but did work as a paralegal and legal assistant for several years.

[Floogeldy]

4. True

But I'm concerned about the funds in the 401k having not been subjected to income tax yet. I just don't know how that is handled. I appreciate your responses, ET. Maybe a lawyer will see my post.

[radwriter0555]

7. I'm working on some estate stuff too. I have a PERS retirement account

that has a substantial amount of $$ in it, and because I'm leaving the country in June, and severing all ties with the US, I'm looking for the best possible way to gradually get my $$ out of the country. It appears that rolling it into an IRA in an international bank like Barclays may be a step in the right direction. They have offshore banking in the Caymans as well, which got my attention first of all, and checking them out, they seem solid and reputable.

When I spoke with the PERS rep to make sure I could do these things, she asked why I was leaving, and I told her that first, I am very liberal and don't like the investment PERS has made in very very republican cos, like halliburton, raytheon, and so on. And second that the election broke my heart, and that I really believed that the GOP owns the election process now, and that our once free, open, fair and honest elections are a thing of the past.

She said she had heard others protest about PERS investment, but I was the first that she had talked to who was leaving for those specific reasons.

[Floogeldy]

5. ttt

[Floogeldy]

6. Any estate lawyers around?