IRAs and Retirement Accounts

Unfortunately, one of my clients is entering the last stages of her life.  Her deductible medical expenses this year have been substantial due to home healthcare and hospice care.  I checked with her CPA and confirmed that a portion of her IRA can be converted to a Roth IRA for a modest income tax cost. 

When an IRA account owner dies, his or her designated beneficiary can choose to withdraw the account or maintain the IRA as an “Inherited IRA.”  Numerous beneficiaries of Inherited IRAs have declared bankruptcy and claimed that the Inherited IRA was exempt from attachment by the creditors.  Some Circuit Courts of Appeal had held that inherited

A prior article pointed out that higher tax rates in the future would increase the chance that converting your IRA to a Roth IRA would provide a benefit to you and your family. We now know that income tax rates for high-income individuals will increase beginning in 2013, due to the 2010 Healthcare Act.

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