Bruce Steiner

If you are age 65 and convert to a Roth IRA, and you live another 20 years, and you then leave it to or in trust for the benefit of a grandchild age 20, with a 61.9 year life expectancy, it will be about 82 years until all of the assets of the IRA are distributed. The income tax law has changed many times since it began in 1913, and it will likely change many more times over the next 82 years. The rates were as high as 91% as recently as 1964, and as low as 28% as recently as 1990. No doubt over the next 82 years there will be years when the rates are higher and years when the rates are lower. The difficulty of a VAT is that, even if you give a credit to the lowest income people, it is hard to raise sufficient revenue from the highest income people. Of course, in most countries, they have a VAT in addition to an income tax at rates higher than ours (and things such as medical care are paid for out of tax revenue). Since no one can predict the future of the tax law over a long period of time, I suggest that people take advantage of the opportunities based upon the current tax law and what they reasonably expect the tax law to be in the relatively near future. In most cases, it would take a very substantial decrease in income tax rates in order to offset the benefits of converting to a Roth IRA. While such a change is possible, I don't see any reason to bet on it. ------------------ Bruce Steiner, attorney (212) 986-6000 (NY office) (201) 862-1080 (NJ office) also admitted in FL

I just wrote an article on this, which has been accepted for publication in Estate Planning. It is scheduled to appear in the December 1999 issue. ------------------ Bruce Steiner, attorney (212) 986-6000 (NY office) (201) 862-1080 (NJ office) also admitted in FL

This will vary from state to state. In many states, divorce will automatically revoke any provisions for the spouse in a Will, but will not revoke any nontestamentary provisions for the spouse. However, in some states, divorce may revoke nontestamentary provisions; or divorce may not revoke provisions in a Will. Of course, the parties ought to (i) deal with this in the separation agreement, and (ii) execute new Wills and beneficiary designations. ------------------ Bruce Steiner, attorney (212) 986-6000 (NY office) (201) 862-1080 (NJ office) also admitted in FL

If you file a second return before the due date, it's not really an amended return, but rather it becomes the original return, in place of the first one. The real problem will arise in a year or two when people who thought their income was under $100,000 and converted to Roth IRAs find out on audit that their income was over $100,000. This could happen, for example, if someone is a partner in a partnership and the partnership's income is increased on audit. The proposed regulations on Roth IRAs don't offer any help. The IRS felt constrained by the statute, as amended in 1998. We'll have to wait and see if the § 1.9100 regulations offer any relief. ------------------ Bruce Steiner, attorney (212) 986-6000 (NY office) (201) 862-1080 (NJ office) also admitted in FL

There are two different issues here: 1. There are numerous PLRs allowing a beneficiary of an inherited IRA to move the IRA from one financial institution to another financial institution. Since the beneficiary could have simply taken all of the money out of the IRA, there is no reason not to let him/her move the IRA to another financial institution. 2. It makes very little difference whether the procedure for a beneficiary of an IRA to leave the balance remaining at his/her death to someone is by beneficiary designation or by Will. The effect is the same in either case. Of course, since (except for retirement benefits passing to a spouse) we generally recommend that our clients leave assets in trust rather than outright, we can avoid this issue. ------------------ Bruce Steiner, attorney (212) 986-6000 (NY office) (201) 862-1080 (NJ office) also admitted in FL