| As our population ages more and more wealth will be | | | | accomplish. |
| passed between generations. In fact there will be | | | | Why have an IRA transfer all of it's assets to an LLC? |
| more wealth transferred over the next twenty years | | | | The reason is simple and powerful. Once the money is |
| than in anytime in our country's history. IRA assets will | | | | funded into the LLC, the manager of the LLC will |
| comprise a large portion of the dollars transferred. | | | | control what happens to the LLC assets NOT the IRA |
| Many will pass IRAs with balances of $100,000+ to | | | | owner. In fact, the IRA owner can not be the manager |
| their children. Many will transfer balances of | | | | of the LLC. Doesn't this result make sense? You may |
| $1,000,000+. So why should you care? | | | | be asking yourself, does this prohibit your son or |
| What do you think your children will do with $100,000 - | | | | daughter from distributing the IRA and getting the |
| $1,000,000+ cash in an IRA after you have passed | | | | moneyt? The answer is It does. When the IRA |
| on? Will your children continue to invest the money | | | | distributes assets what is it distributing? It is actually |
| wisely and save it for their retirement? | | | | distributing the LLC interest and not cash. An IRA |
| A major concern should be the reality that your | | | | distribution DOES NOT get the money out of the LLC. |
| children will do things with that money that you would | | | | So your son or daughter in the above example now |
| not approve of or might even make you roll over in | | | | has ownership of the LLC interest and the manager of |
| your grave. Just because it took you 30+ years of | | | | the LLC still controls the money (including distributions |
| disciplined savings to accumulate the money, shouldn't | | | | to pay estate and income taxes). If the LLC manager |
| your children have the right to burn through that money | | | | has enough discretion in the LLC operating agreement, |
| in three to six months of self-gratification? Remember | | | | the manager does not have to take money out of the |
| there will be income taxes due and potentially estate | | | | LLC for any reason he/she does not feel is |
| taxes as well and even If your children do not blow | | | | appropriate. |
| your nest egg all at once they might slowly burn | | | | What's not appropriate? |
| through it over a several year period by spending well | | | | The list is long and would probably include many |
| above their normal standard of living. Why would they | | | | fantasies your children held that were not shared by |
| want to save that money for retirement or your | | | | you. The LLC structure acts much like an irrevocable |
| grandchild's education when they can buy a new boat | | | | trust (IT) after you die. You are probably familiar with |
| and schedule to take a month long trip to Europe? | | | | how ITs are used to make sure our kids spend |
| Question: if you had the ability to control your IRA | | | | inherited money wisely (per the trust agreement and |
| assets from the grave would you? | | | | with the watchful/discretionary eye of a trusted |
| I believe that well over 80% of those reading this | | | | trustee). An IRA with the LLC structure basically does |
| article will say yes. | | | | the same thing. You would simply setup this structure |
| How can you control IRA assets from the grave? | | | | inside your IRA and have a trusted person or institution |
| By using a simple LLC (limited liability company). An IRA | | | | act as the managing member of the LLC. Direction will |
| can invest in all sorts of interesting assets including an | | | | be given to the manager of the LLC through a well |
| LLC interest. There is a specific way an IRA needs to | | | | drafted operating agreement. The manager of the |
| purchase an LLC interest which is outside the scope | | | | LLC not the IRA beneficiary controls the money in the |
| of this article. However, the transaction is not difficult to | | | | LLC. |