ELDER LAW NEWS & NOTES DAVID KEEFE EXPLAINS IRAs

AT OCTOBER 22nd ROUNDTABLE

David Keefe, of Eagle Strategies, explained the intricacies of IRAs to a diverse audience of friends and
NOVEMBER 2009 /NUMBER 64
clients.
MEDICAID UPDATE SURVIVES SURPRISE
LAW OFFICE OF WILLIAM J. BRISK
Individual Retirement Accounts were designed
For nearly a decade, to induce
Bill hasAmericans
presented to create their own
with Boston retirement nest
attorney,
1340 CENTRE STREET, SUITE 205
eggs by eliminating taxes on investments
Harry Margolis, and growth
sponsored during
by one’s peak
Professional earning years.
Educational Taxpayers
Services, with income
NEWTON CENTER, MA 02459
below
TEL: 617-244-4373 about $95,000 (or $155,000
Incorporated. This year, Jeff Bloom, a partner of Margolis and Bloom, would be
if they file joint returns) may invest up to $6,000 a year that otherwise
taxed
FAX: 617-630-1990 into IRAs; future earnings and appreciation
replaced Harry. John are not taxed
Ford, until services
the legal funds are attorney
withdrawn. who There
hasare penalties for
withdrawing
WWW.BRISKELDERLAW.COM
funds before one reaches 59 and for not taking minimum distributions (RMDs) after one reaches 71.5
argued most of the important appeals involving Medicaid policy and
years.
Most IRAs grow from decisions,
“rollovers”joined thepreviously
of funds team. saved in employee sponsored retirement accounts.
Withdrawals are taxed as ordinary income, so most owners of IRAs try to withdraw as little as possible. The
government imposes Required Minimum The 800 page book
Distributions that accompanies
(RMDs) the course
calculated according to thehad
IRS’arrived.
Uniform Lifetime
Table which is intended to leavePower points, funds
sufficient in both printed
in the and projected
IRA during versions,
one’s lifetime to fundwere set. The
a generous retirement.
MEMBER Currently
AND FELLOW oneOFmust withdraw audience
about 3.9% arrived
of thepunctually
amount of for the an
IRA8:30 a.m. start.
calculated at the end of the previous year after
reaching
THE NATIONAL 72. OF
ACADEMY RMD percentages increase as one ages i.e. as life expectancies decline. An 80 year old, for
ELDER LAW ATTORNEYS to withdraw at leastBut,
example, needs 5.3% of his
five or her before
minutes nest egg. theIndaya perfect world was
long event in which
dueinvestments
to begin, keep
pace with inflation, there should
Bill learned that Jeff, recuperating from the flu, would not be ableruns
be sufficient funds in well managed IRAs so that the owner never to out of
ATTORNEYS: money. But inflation and returns
attend.on investments vary, as we all now know. .
WILLIAM J. BRISK
ELLEN B. SCULT The companies which manage such funds calculate the precise RMD each year. The penalty for not
taking an ToRMD
RMD is severe, 50% of the saveamount.
the show, as well asthe
To counteract hissevere
voice decline
(and sanity), Bill market, the
in the stock
CHERYL B. STRUNSKY recruited Braintree attorney, Bob Gorfinkle, who had taken a seat in
DAVID C. VALENTE government suspended RMDs in 2009. That suspension is not likely to be repeated.
the audience expecting to enjoy watching others perform. Bill also
PARALEGAL: Maintaining an IRAasked Cheryl
is relatively Strunsky
simple but to and David
optimize Valente,
their use andattorneys in our
to pass them on office,
to one’stospouse or
children
JENNIFER A. DUHAIME-BAKER requires present
considerable skill. some
Keefe of Jeff’s
described topics
two (last minute
strategies that strategies
IRA owners for single
should elders,conversion
consider:
to Roth IRAs and estate planning designed to allow successors to “stretch” their withdrawals.
protecting elders’ homes, and trusts to benefit disabled persons). Bill
PROBATE ADMINISTRATOR: took on one of Jeff’s topic as well.
LISA C. BILBO Roth IRAs operate exactly opposite from traditional IRAs; contributions to Roths are taxed but
withdrawals from them are not. Keefe posedthe
Despite thecrisis,
exampletheofprogram
a 72 yeargenerated
old (we’ll call her “Prudence”) whose IRA
considerable
ADMINISTRATIVE: is worth about $100,000 butenthusiasm
has sufficient income from other investments or work to forego the MDR. Beginning
from the 140 in attendance, most of whom were lawyers,
DEBRA L. BELANGERin 2010, anyone regardlessmanyof income, will be able to make such a conversion. Prudence, for example, might
well known experienced Medicaidtoplanners. The audience
withdraw all her IRA funds and pay a tax of about $30,000. According Keefe, if the Roth managesalso a 5% annual
included
return it would grow to almost a delegation
twice what fromIRA
the traditional Medicaid’s
would yield,estate recovery
including team
annual withdrawals. And, those
IN THIS ISSUE: who inherit whatever is left (appearing
of the Roth when for the seconddies,
Prudence yearcan
in atake
row).
theirAtdistributions
the end of over
the afternoon,
a single life
expectancy. Before exhausted
converting, however, fromseektheprofessional
effort and advice,
tension,weigh
Bill was
both nevertheless
financial and pleased
tax factors, and be
Topic Page:
to hear
sure that you have the liquidity to pay compliments
the one timefor tax.how seamless the program had gone despite
Medicaid Update Survives 1
the fact that nearly half of it had to be improvised in Jeff’s absence.
SuperLawyer 1
Estate planning involving IRAsthis
focuses on thosetowho inherit
Bill takes opportunity thank his whatever is left
colleagues forofstepping
a traditional IRA. Many
in, with
David Keefe Explains IRAsrealize
people don’t 2 that IRAs, when they are inherited, are subject to two taxes – an estate tax if the IRA and
practically no advance notice, and performing so well.
other assets left behind are greater than $3.5 million and an income tax based on re-calculated RMDs. Keefe
advises that persons who inherit IRAs may want to roll them over into their own IRAs in order to minimize future
MDRs.
These strategies may be even more prudent if, as seems likely, tax rates begin to rise in the future.

Law Office of William J. Brisk SUPERLAWYER AGAIN

1340 Centre Street, Suite 205
Newton Center, MA 02459 Boston Magazine named Bill Brisk a “Super Lawyer” in its
This newsletter is not intended as a
substitute for legal counsel. While November, 2009 issue which is currently on the newsstands. This
every precaution has been taken to was the fifth consecutive year that Bill received the honor which
make this newsletter accurate, we recognizes, according to a professionally conducted poll, the top 5%
assume no responsibility for errors or of attorneys in Massachusetts.
omissions, or for damages resulting
from the use of the information in this
newsletter.
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