Qualifying 401(k) dollars for stretch IRA treatment

The National Underwriter writes about how to qualify 401(k) assets for stretch IRA treatment, noting the following:

One of the most powerful estate planning vehicles today is actually hiding in your clients’ IRAs. Though the inherited — or “stretch” — IRA can allow your clients’ beneficiaries to stretch the tax-deferral benefits associated with these accounts for years after the original owner’s death, the equation becomes more complicated when your client holds retirement funds in a qualified plan, such as a 401(k) or profit sharing plan. These clients don’t have to miss out on the opportunity to stretch the tax benefits of these retirement plan dollars into the next generation, but careful planning is necessary to ensure that your clients don’t end up taking a tax hit instead.

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Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.