How to Retain Retirement Accounts and Preserve the Stretch IRA
Under the IRA rules, all your client needs to do is name a person (or qualifying trust) as his IRA beneficiary and that beneficiary is guaranteed the stretch IRA. This is huge for financial advisors. This is why we said earlier that every IRA can now be a stretch IRA, regardless of the age of the IRA owner.
Sales Idea
You should contact every client with a retirement account and make changes or update beneficiary forms as needed. Every stretch IRA is worth a fortune to your practice. Even a modest IRA can be parlayed into millions by creating a stretch IRA. What would many stretch IRAs be worth in terms of value to your business? Probably many, many millions over a 30 or 40 year period.
Titling of an Inherited IRA
The deceased IRA owner’s name must remain on the inherited IRA account title and the account title must indicate that it is an inherited IRA by using the word “beneficiary” or “beneficiary IRA” or “inherited IRA.” There is no set format as long as the deceased IRA owner’s name remains on the account and it is clear that this is an inherited IRA.
“John Smith IRA (deceased 11/27/09) F/B/O John Smith, JR., Beneficiary”
An inherited IRA is an IRA inherited by anyone other than the spouse. A non-spouse IRA beneficiary cannot do an IRA rollover. Only a spouse can do that. The non-spouse can move an inherited IRA to another institution only by trustee-to-trustee transfer.
