Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

LJN NewslettersNewsSectionsThe Matrimonial Strategist

Getting the 'Benefit' Out of Retirement Plan Benefits

BY Ellen Schiffer Berkowitz
October 31, 2007

It is not uncommon for a client's wealth to be concentrated in one or more retirement plans. As such, the disposition of such retirement plans, both during life and after a client's death, are often at the heart of the negotiations for a prenuptial or divorce agreement. Understanding the various income tax savings as well as the traps associated with retirement vehicles will give your clients the advantage when involved in such negotiations and thereby enable your clients and their beneficiaries to maximize the benefits of these valuable assets. This article offers a few practical strategies to help your clients get the maximum benefit from their retirement plans, with the lowest tax cost possible.

Do Some Good

If a client is charitably inclined, retirement plan benefits are the best assets to use for charitable giving. Assuming the charity is qualified under the Internal Revenue Code, then no income tax will be generated by distributions to the charity and an estate tax deduction will be allowed for the participant's estate. Further, if plan benefits are given to a charity during the participant's lifetime, no gift tax will be due. If the same retirement plan benefit is instead given to an individual beneficiary, the income and estate or gift tax costs would significantly deplete the asset. In other words, a retirement plan benefit is worth more to a charity than it is to an individual beneficiary. In addition, if a client is 70 1/2 years old and meets the other relevant statutory requirements of the Pension Protection Act of 2006, then he or she could exclude up to $100,000 of gross income by making a charitable contribution directly from his or her IRA to a qualified charity by the end of this year. If a client plans to make charitable gifts and has other assets to leave to his family, then naming a qualified charity as the beneficiary of a retirement plan could save the client significant taxes.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Yachts, Jets, Horses & Hooch: Specialized Commercial Leasing Models Image

Defining commercial real estate asset class is essentially a property explaining how it identifies — not necessarily what its original intention was or what others think it ought to be. This article discusses, from a general issue-spot and contextual analysis perspective, how lawyers ought to think about specialized leasing formats and the regulatory backdrops that may inform what the documentation needs to contain for compliance purposes.

Hyperlinked Documents: The Latest e-Discovery Challenge Image

As courts and discovery experts debate whether hyperlinked content should be treated the same as traditional attachments, legal practitioners are grappling with the technical and legal complexities of collecting, analyzing and reviewing these documents in real-world cases.

Identifying Your Practice's Differentiator Image

How to Convey Your Merits In a Way That Earns Trust, Clients and Distinctions Just as no two individuals have the exact same face, no two lawyers practice in their respective fields or serve clients in the exact same way. Think of this as a "Unique Value Proposition." Internal consideration about what you uniquely bring to your clients, colleagues, firm and industry can provide untold benefits for your law practice.

Risks and Ad Fraud Protection In Digital Advertising Image

The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.

Turning Business Development Plans Into Reality Image

This article offers practical insights and best practices to navigate the path from roadmap to rainmaking, ensuring your business development efforts are not just sporadic bursts of activity, but an integrated part of your daily success.