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It’s Time To Reconsider IRA Beneficiaries

Have you named your children as beneficiaries of your IRA? Perhaps it is time to re-think that decision.

A recent United States Supreme Court ruling raises concerns about asset protection and the designation of IRA beneficiaries. In June the high court unanimously ruled that, under federal law, an IRA that is owned by a beneficiary is not protected in bankruptcy. The ruling does not affect the bankruptcy protection from creditor claims of an individual’s IRA. Rather, it exempts from bankruptcy protection any IRA that has been inherited. This means that IRAs that are transferred by an IRA beneficiary after the IRA owner’s death to an IRA in the beneficiary’s name could be lost to creditors’ claims if the beneficiary files for bankruptcy.

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Five Signs that Your Company is Doomed

We have seen a lot of companies go into bankruptcy over the years, and there are some common issues with most of them. These are issues that may not necessarily show up on the balance sheet, but in my experience they are sure signs that trouble is ahead. If some of the signs on this list apply to your company, then some major course corrections may be in order. If all of the signs apply, then your company is probably doomed.

1. The owner’s son or daughter is going to take over, no matter what, and he or she is unqualified. In a lot of family-owned businesses the company falls apart in a few generations because owners conflate a management succession plan with an estate plan. Giving Junior ownership of the family company after the founder is gone is fine, but management should only consider giving Junior the job of running the business if he or she would reasonably have been hired by an objective HR manager from among a pool of qualified candidates. Unlike good looks, managerial competence is not an inherited trait.

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