Trusteed IRA Stories

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My SmartIRA™ Story


When my first husband died, I thought I’d never remarry, but a few years later I met Ed.  Ed had children of his own, just like me, and we talked about how we wanted to make sure that our new marriage wouldn’t be problematic for our respective children.  My sister and I wish that my father had had similar conversations when he remarried late in life.  When he died, all of his assets passed to his new wife, and when she passed, all of his assets went to her children.  We were cut out completely.  It wasn’t malicious, but it was a shame to see all that he and our mother had worked for passed on to a family that he hardly knew.

I knew that I wouldn’t make that mistake, and Ed agreed.  That’s why we both set up a SmartIRA™ (custodian neutral Trusteed IRA), so that when we pass, our family legacy is protected and will stay in the appropriate family’s bloodlines.  Love later in life shouldn’t have the unintended consequence of disinheriting families, and with the SmartIRA™, I can sleep soundly at night knowing that my children and grandchildren won’t suffer the same fate as my sister and I suffered.

Our SmartIRA™ Story

The Greatest Financial Gift

It’s hard to believe that we retired almost ten years ago, and retirement has been great.  Some of our favorite times are spent around the dinner table when our daughters and their families visit.  This is what retirement is supposed to be, but when the family is together we can’t help but worry what their retirement will be like.  We were lucky.   We were both part of the “Pension Generation,” and years of hard work were rewarded with pensions that have made all the difference in our lives, but our daughters and our grandchildren won’t have pensions to rely upon.  Heck, they may not even have Social Security.  

We decided that we wanted to give our children, and especially our grandchildren, the greatest financial gift that we could imagine.  Our advisor told us about a custodian neutral Trusteed IRA, and we decided to use the SmartIRA™ to structure our retirement accounts so that when they retire, they should have income coming in that would look similar to the pensions and Social Security that we receive.  We know that with the gift of the SmartIRA™ they’ll have many of the same financial advantages that our generation enjoyed, and we pray that this allows them to enjoy their retirement just like we are enjoying ours.

My SmartIRA™ Story

Saving Thousands of Dollars

I wanted to make smart decisions on my retirement accounts.  Those dollars were earned by years of hard work, dedication and making smart decisions.  So when I went to an attorney to discuss the options, I was shocked that it would cost thousands of dollars to set up structures to protect my accounts when they pass to my children.  I’m not cheap, but I am frugal, and I didn’t get to where I am by throwing thousands of dollars around carelessly.  That’s when I turned to the SmartIRA™.  This is what this trust company calls a custodian neutral Trusteed IRA.

With the SmartIRA™, I was able to set up a structure that protected my accounts and my heirs at a cost that was about 1/10th of what the attorney wanted to charge me.  On top of the cost savings, it was much quicker and easier to set up.  My SmartIRA™ took me about ten minutes to setup and literally saved me thousands of dollars.  That’s more money that I get to use to travel, and one day those are additional dollars that my heirs will get to enjoy as well.  Now that’s a smart financial decision!

My SmartIRA™ Story

Creditor Protection

As a doctor, you get used to the fact that frivolous lawsuits are a way of life, and with malpractice insurance costs skyrocketing and coverage covering less and less, creditor protection is a must.  I’ve always known that retirement accounts were creditor protected and have always put as much money into those accounts as possible.  My father did too.  He was a doctor as well, and he also knew that he needed to protect the assets that he and my mother worked so hard to accumulate.  We researched and found a solution called the custodian neutral Trusteed IRA or SmartIRA.

What shocked him, shortly before he passed, was to learn that inherited retirement accounts are not always creditor protected, so he turned to the SmartIRA™ to help.

Just before he passed, my father learned that almost 20 states do not provide creditor protection to inherited IRAs, Roth IRAs or both.  Knowing that the inheritance that he planned to leave behind may be fair game in a frivolous lawsuit infuriated him, especially since his only child was a surgeon.  So, before he passed, he set up his retirement accounts as SmartIRA™ accounts to provide creditor protection for those assets.  Now, I sleep soundly knowing that my inheritance can’t be touched by people trying to make a quick buck by filing frivolous lawsuits.

Our SmartIRA™ Story

A Real “Stretch IRA”

Beautiful, aren’t they?  Fourteen grandchildren in all, and who knows if there will be more?  My CPA has been working with me, encouraging me to take advantage of the “Stretch IRA” so that each of these grandkids can distribute money over their life expectancy, but then I asked him a question that stopped him in his tracks.  “Have you ever seen this actually work like it’s supposed to?” I asked.  He replied, “Honestly, no, because they usually take it all out at once and buy a new car, get granite countertops, something.”  

I have to admit, I like the idea of a “Stretch IRA,” but I can’t help but think that it’s more of a myth than a reality since almost no one executes it properly.  That’s when we took a look at the SmartIRA™.  The SmartIRA™ can be structured to ensure that the concept of a “Stretch IRA” is actually executed.  I mean, seriously, out of 14 grandchildren, how many do you think will actually execute the “Stretch IRA” properly over their entire lives?  With the SmartIRA™, we have moved the “Stretch IRA” from being a myth to our family’s reality.  The IRS made this reality which they call the Trusteed IRA and this trust company just make it really easy to use with their brand called the SmartIRA.

Our SmartIRA™ Story

Empower our Children, not Enable Them

As a family, we believe in hard work, and we don’t want to rob our children of the valuable life lessons of having to work for a living.  We both went to school with kids who were stereotypical “trust fund kids,” and we don’t want our kids to turn out like many of those kids did.  To be honest, we worry about the impact a large inheritance may have on our kids and their families.  We know that someday our life savings may be theirs, and we want any inheritance to be a blessing and not a curse.  We want to empower our children, and not enable them, so we turned to the SmartIRA™.

We structured our retirement accounts to pay out over their lives so that their inheritance could supplement their lifestyle and not create their lifestyle.  We wanted them to learn the lessons of a hard day’s work, and for them to have the pride and satisfaction of making it on their own in life, not from having everything handed to them.  Warren Buffett once said that a family should leave their kids enough to do anything but not enough to do nothing.  We completely agree, and with the SmartIRA™, we are in a position to do just that.

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