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At Karen S. Gerstner & Associates, P.C., we assist clients in providing for the distribution of their retirement plans on their death in a manner designed to minimize both income taxes and estate taxes and to ensure long-term preservation of these assets for their beneficiaries. We apply the highest level of expertise and over 40 years’ experience to protect our clients’ assets for the long term and to provide clients with the confidence and peace of mind that they have addressed this important aspect of their estate plan.
In assisting clients with estate planning for their retirement plans, Karen S. Gerstner & Associates offers an exceptional level of expertise that sets the firm apart from other estate planning practitioners. Through her long-standing, keen focus on this complex practice area, Karen Gerstner has built a strong reputation among legal and financial professionals and clients for her skill and knowledge relating to estate planning with respect to these valuable but complex assets that most people own.
Since 1986, Karen has been Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. She is also a Fellow of the American College of Trust and Estate Counsel, an elite designation reserved for lawyers who demonstrate the highest level of professionalism and expertise in wills and trusts, estate planning and probate, and tax law.
At Karen S. Gerstner & Associates, we offer expertise comparable to that of a much larger law firm, while maintaining a commitment to the highest level of personal service to every client. We strive to build long-term client relationships based on mutual trust and respect. The success of our practice is demonstrated by the fact that most of our clients come to us through referrals from financial advisors, trust officers, accountants, and other clients.
Most clients own retirement plans. This category includes employee benefit plans of all types and IRAs of all types. In fact, in many cases, retirement plans are among the most valuable assets clients own.
Clients not only consider their retirement plans as a source of support for themselves and their spouse (if married) during their retirement years, but also as assets to pass on to their children and other beneficiaries on their death. Unfortunately, estate planning with respect to retirement plans is more complex than estate planning with respect to most other assets because of the extensive and complicated federal tax laws and distribution rules applicable to these assets.
All retirement plans are treated as assets of the owner’s estate for federal estate tax purposes. For this purpose, even pre-tax retirement plans are valued at their full fair market value inside the plan, without a reduction for income taxes that will be paid when those assets are distributed out of the plan. In addition, all retirement plans, other than Roth IRAs and Roth designated accounts, are also subject to federal income taxes upon distribution.
In some cases, retirement plan assets are subject to both the top income tax rate, currently 37%, and the top estate tax rate, currently 40%, putting these assets at risk of being taxed at a very high combined federal tax rate. Although qualified distributions from Roth IRAs and Roth designated accounts are not subject to federal income taxes, even Roth retirement plans are subject to the complicated new rules recently made effective by the SECURE Act.
Retirement plans are distributed on the owner’s death pursuant to the beneficiary designation form (whether paper or electronic) on file with the plan administrator or IRA custodian. Thus, the owner’s will or revocable trust is not the primary transfer document for these assets. That is why Karen S. Gerstner & Associates helps clients provide for the distribution of these assets at death by providing written instructions for completing all their beneficiary designation forms, including, in certain cases, preparing attachments to the applicable beneficiary designation forms, coordinating the distribution of the client’s retirement plans with the distribution of the client’s other assets being distributed pursuant to their will or revocable trust, and advising clients regarding all tax aspects relating to the distribution of their retirement plans.
After the owner’s death, Karen S. Gerstner & Associates advises the owner’s beneficiaries of the rules applicable to the retirement plans they have inherited. These rules have changed significantly in recent years and are very complicated. Mistakes in handling inherited retirement plans can lead to penalties and additional income taxes, plus additional professional fees incurred to fix those mistakes.
At Karen S. Gerstner & Associates, we apply over four decades of law practice experience and our proven expertise in estate planning with respect to retirement plans to help clients integrate the distribution of their retirement plans with the rest of their estate plan in a manner that minimizes estate and income taxes on those assets, to the extent possible, and protects those assets to ensure financial security for the beneficiaries of these assets upon the client’s death.
We welcome inquiries concerning our retirement benefit distribution planning services. We serve clients throughout the Houston metropolitan area and elsewhere in Texas. Schedule a consultation by calling us at (713) 520-5205 or using the online contact form.
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