heirs inheritance from a $5m ira rollover

MOMENTUM ADVANCED PLANNING | 1

What do heirs inherit from my $5M IRA

Rollover?

For Illustrative Purposes ONLY

For:1. Financial Advisors2. CPA’s3. Non Profit Development Officers4. UHNW Investors


Disclosures

IRS Circular 230 Disclosure:

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

Past performance is no guarantee of comparable future results

Diversification does not guarantee investment returns and does not eliminate the risk of loss


Disclosures

Please Note: This presentation is designed to provide introductory information in regards to the

subject matter covered and by no means complete.

Consult your attorney, financial advisor or tax advisor for complete up-to-date information concerning

Federal and state tax laws.

Momentum Advanced Planning and its representatives do not provide tax, investment, accounting or legal

advice and not “fiduciaries” (under ERISA, the Internal Revenue Code of otherwise). Any taxpayer should

seek advice based on the taxpayers particular circumstances from an independent tax advisor.


Disclosures

The projections here are based on assumptions stated and the information provided is not a reflection of past

experience or future guarantees. Changes in tax law could affect the tax consequences.

Momentum Advanced Planning strongly recommends that any proposed plan or changes to an existing

plan be reviewed by your tax advisor.

Any statements contained herein were not written nor intended to be used for purposes of avoiding

U.S. federal, state, and local tax penalties.

The views contained herein are not to be taken as an advice and or recommendation to buy or sell any

investment. Please consult with your advisor.


75 Year Old Retired Couple


$20M Net Worth


$5M in Assets


$5M

22.9$218k

CalculatingAnnual

RequiredMinimum

Distribution

(for additional information please

refer to Publication 590)

http://www.irs.gov/pub/irs-pdf/p590.pdf


$87k in Income Taxes*

* Assuming 40% Income Tax Bracket


$131k Net Deposit*

* Assuming 40% Income Tax Bracket


The $131k

But I


4 Choices(in no particular order)

(1): Do Nothing

(3): Pension Plan

(2): Roth

(4): RothAlternative

The color coding of the diagrams does not indicate any preferences


5th Option (sudden passing) is by default, and out of everyone’s

control


$2.2M Estate Taxes*

* Assuming 45% Estate Tax Bracket


$1.1M In Income Taxes to Beneficiaries*

* Assuming 40% Income Tax Bracket for Beneficiaries


33% Of Original Balance Remains

$5M

-$2.2M*

-$1.1M**$1.6M

* Assuming 45% Estate Tax Bracket

** Assuming 40% Income Tax Bracket


Not much inheritance left for you kids - Sorry

MOMENTUM ADVANCED PLANNING | 19For Illustrative Purposes ONLY

Do nothing and live to 95

MOMENTUM ADVANCED PLANNING | 20For Illustrative Purposes ONLY

Do nothing and live to 95Option 1

For Illustrative Purposes ONLY

Roth


Comparison (for Illustrative purposes ONLY)

Retiree Lives to 95 and passes Roth Pension Plan (1, 2, 3 & 4)

Roth Alternative (1, 2, 3 & 4)

Are distributions required? No Yes No

Are distributions subject to income tax?

No Yes No

Are there penalties for withdrawals prior to age 59 ½?

No Yes No

Does the plan provide a death benefit beyond the cash balance? (b)

No No Yes (1)

Death benefits subject to income and/or estate tax? (b)

Yes Yes No (1)

Estimated taxes paid $4.3M

$6.6M (3) <$2M (3 & 5)

Benefits received by retiree + heirs $5.2M

$7M (3) $7M (3)

1) Requires underwriting and illustration of life insurance policy

2) Please contact us for more detailed information

3) Please consult your tax and financial advisor

4) Not suitable and appropriate for every investor

5) Assumes taxes are paid at death from policy


Reminder

Profit Sharing and Roth Alternative Strategies:

• Examine possibilities to remove assets out of taxable estate

• Not suitable and appropriate for every investor

• Requires underwriting and illustration of life insurance policy

• Retiree did not need IRA Rollover distributions

• Consult your legal council on formation of any legal strategies

• Consult your tax and financial advisor before deploying any such strategy

• Contact Amir Rafizadeh for more details on both Profit Sharing and also Roth Alternative Strategies

• Illustration occurred in 2013 so rates and assumptions were valid for that time - (for up to date information please contact us)

This has been prepared by Amir Homayoun Rafizadeh

For more information please contact me:


Sources of Pictures (1)

Uncle Sam Tax Picture:

http://www.savvysenior.org/

Retired Couple Picture:

http://www.dia-trofis.gr/eidisis/4-aploi-kanones-igeias-makrozoias/

Net Worth Picture:

http://www.investopedia.com/financial-edge/1212/net-worth-through-your-life.aspx

RMD Taxes Picture:

http://abcnews.go.com/blogs/business/2012/06/median-household-net-worth-down-35-percent/

IRA Rollover Picture:

http://www.bgcmc.org/index.cfm/ira.htm















IRA RMD Table Picture:

http://www.irs.gov/publications/p590/ar02.html

Don’t Need The Money Picture:

http://juangreatleap.com/2011/12/20/9-pinoy-startup-myths-i-discovered-just-werent-true-part-1-of-3/

Burn The Money Picture:

http://www.thedisciplinedinvestor.com/blog/2009/01/14/banks-we-dont-need-no-stinkin-lending/

Bank Teller Deposit Picture:

http://buzz.money.cnn.com/2012/07/16/banks-loans-deposits/

Tax Alternatives Picture:

http://www.foxbusiness.com/personal-finance/2014/02/21/earned-income-tax-credit-could-pay-off/
















Estate Taxes Picture:

http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/estate-tax/

Family Funeral Pictures:

http://realtruth.org/articles/090806-007-religion.html

Heirs Inheritance Picture:

http://www.grantthornton.ie/Services/Investment-Life-and-Pensions/Personal-financial-counselling/Inheritance-and-gift-tax-planning

4 Choices Picture Source:

http://gregory-g-allen.blogspot.com/2011_08_01_archive.html

Shocked Kids with no inheritance pictures Source:

http://www.wnd.com/2012/02/now-kids-targeted-in-digital-privacy-breach
















Why most advisors NEVER see their clients entire assets

Out on Slideshare next:


Disclosures

IRS Circular 230 Disclosure:

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

Past performance is no guarantee of comparable future results

Diversification does not guarantee investment returns and does not eliminate the risk of loss


Disclosures

Please Note: This presentation is designed to provide introductory information in regards to the

subject matter covered and by no means complete.

Consult your attorney, financial advisor or tax advisor for complete up-to-date information concerning

Federal and state tax laws.

Momentum Advanced Planning and its representatives do not provide tax, investment, accounting or legal

advice and not “fiduciaries” (under ERISA, the Internal Revenue Code of otherwise). Any taxpayer should

seek advice based on the taxpayers particular circumstances from an independent tax advisor.


Disclosures

The projections here are based on assumptions stated and the information provided is not a reflection of past

experience or future guarantees. Changes in tax law could affect the tax consequences.

Momentum Advanced Planning strongly recommends that any proposed plan or changes to an existing

plan be reviewed by your tax advisor.

Any statements contained herein were not written nor intended to be used for purposes of avoiding

U.S. federal, state, and local tax penalties.

The views contained herein are not to be taken as an advice and or recommendation to buy or sell any

investment. Please consult with your advisor.

| 32

REFERENCE

heirs inheritance from a $5m ira rollover

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