Heritage IRA: A New Way to Save

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Fall 2013

Many individuals put a lot of thought into setting retirement savings goals and carefully funneling money into an IRA. But if they don’t put the same amount of consideration into what will happen

to their money after death, their hard-earned wealth might be spent in ways they never intended.


Now a new IRA option is available. The U.S. Bank Heritage IRATM is an IRA savings vehicle that can provide the ease of use and potential tax benefits of traditional and Roth IRAs, with the financial control and oversight of a trust.


“The Heritage IRA makes it possible to obtain the control you want without added complications,” says Michael Poulter, Market Leader for The Private Client Reserve.


Some IRA owners assume that if they name their children as beneficiaries, for example, their assets will be distributed in small amounts to their children and grandchildren for decades after they die. That’s not always the case, says Poulter. “In reality, many children liquidate IRAs as soon as they inherit them, and in five to 10 years, the money is gone.”

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Fall 2013

In other cases, an individual might leave his or her IRA to a current spouse assuming the money will revert back to their children after the spouse’s death. But instead, it is rolled over into another IRA, and the spouse remarries and names the new spouse and new children as the beneficiaries — leaving the children from the first marriage with a much smaller part of the asset than intended.


With a traditional or Roth IRA, IRA holders often have little control over how their wealth is distributed after their death. Historically, those who have wanted to maintain added financial control have had to draft legal trusts to guarantee that their wishes would be met.

But setting up these documents can be a costly and complicated legal process that some people might rather avoid.


For those concerned that their assets might not be managed in the way they’d like after they’re gone, the Heritage IRA may be a valuable alternative to other savings vehicles, says Wendy Kelley, National IRA Product Manager for The Private Client Reserve. “If you have a beneficiary who may not be an experienced money manager or might one day be under undue influence to deplete the account, then you might consider the Heritage IRA,” she says. “People work so hard to accumulate their retirement savings, and the Heritage IRA may help ensure that the value of that asset is spread out for as long as possible.”

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Getting Started With the Heritage IRA

The Heritage IRA can be as easy to set up as any other IRA account. Clients simply meet with their Wealth Management Advisor and complete the paperwork. There is a suggested minimum threshold of $2 million, and the Heritage IRA must comply with IRS minimum distribution requirements for beneficiaries. But after that, Heritage IRA holders have the flexibility to choose beneficiaries, determine how much additional access to the funds beneficiaries will be granted, and set caveats about when and where money will be distributed.


With this simple process, individuals may be able to take advantage of the tax benefits of an IRA.

However, U.S. Bank and its representatives do not provide tax and legal advice. So we encourage you to discuss with your tax and legal advisors whether the Heritage IRA is right for you.


At the same time, the Heritage IRA can provide the added control and confidence of a complex legal trust because U.S. Bank takes fiduciary responsibility for the management and distribution of wealth to all Heritage IRA beneficiaries upon your death. When an individual chooses the Heritage IRA, he or she has access to a wealth management team to oversee assets, which may provide the added confidence that the funds may continue to grow and serve the long-term needs of beneficiaries well after the IRA holder’s death.

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