“Inheriting” the IRA*.
Her Financial Advisor talked with Mary Ann about the advantages of “inheriting” the IRA from her father. He showed how she could take distributions from the Inherited IRA over the course of 10 years after death. There isn’t a requirement every year for a distribution. However, Mary must empty the Inherited IRA by the end of the 10th year. In addition, he demonstrated how this allows her beneficiaries (her siblings, nieces, and nephews) to inherit the IRA as a successor and utilize the remaining years within the 10 year rule after her death.
Providing the needed income.
Even with her sizable assets, creating an income stream of $250,000 per year tax-efficiently posed a challenge. Wells Fargo Advisors can help develop an asset allocation strategy to help meet that income need and provide Mary Ann with suggestions regarding which accounts to make withdrawals from to achieve that desired income. Because Mary Ann wants to travel extensively, strategies such as managing agent services† and private money management may help reduce her involvement in the day-to-day management of her assets.
Planning for her estate.
Mary Ann will also want to evaluate estate planning and trust strategies to help provide for her siblings, nieces, nephews and favorite charities. These strategies may include charitable remainder and lead trusts, some outright gifting, and providing financial-management education for her nieces and nephews.
* This information is hypothetical and for discussion purposes only. It is not intended to represent any specific return, yield or investment. It is provided for illustrative purposes only and does not constitute a recommendation to invest in any particular fund or strategy and is not a promise of future performance, an estimate of actual returns or of the volatility any client portfolio may experience. Hypothetical results do not represent actual trading and do not reflect the impact of any fees, expenses or taxes applicable to an actual investment. Hypothetical and past performance are no guarantee of future results. Any names used are fictitious.