Retirement Plan Assets

Historically, a personal residence was the largest asset in an estate. Currently, however, because of changes in tax laws and the tremendous historical growth of some of the equity markets, qualified retirement plans occupy a significant portion of many taxable estates. The rise in the value of the assets held in qualified retirement plans has created new problems, as well as opportunities. In most cases, qualified retirement plans subject the owner, their heirs or their estate to income tax liability, as well as potential estate tax liability.

If you have accumulated significant funds in your tax-deferred retirement accounts, congratulations! Please remember, however, that these funds are tax-deferred, not tax-free. As you know, you will pay taxes on the income you receive in distribution from these plans. Did you know that your estate or your plan beneficiaries also might have to pay taxes on whatever funds are left when you pass away? These taxes due upon your death may be as much as 70 percent!

There are ways to minimize the tax burden of holding these plans until death. Instead of leaving these tax-deferred retirement assets to your family, who will pay the resulting income taxes, consider designating the Medical College of Georgia as the named beneficiary of your qualified retirement plan. This designated gift will pass your assets free of estate and income tax.