The third area of advanced estate planning interest explored in this section involves the preservation of qualified retirement assets for the benefit of heirs. At issue is a January 2001 ruling by the IRS governing the distribution phase of Individual Retirement Accounts. One effect of the ruling was to reduce the Required Minimum Distribution (RMD) amount a retiree must take from his or her IRA.

While many Americans worry about whether or not they'll have enough money at retirement, there are those who have realized financial success and find they do not need all they've saved to enjoy a financially sound retirement. For these clients, the idea of preserving some of their tax-qualified assets for the benefit of heirs is mighty appealing.

Before 2001, it was nearly impossible to hold off distributing one's retirement assets beyond one's life or, at most, the joint life of a husband and wife. The 2001 rules changed that, by allowing the retiree to recalculate the minimum distribution amount annually, which effectively reduces the RMD and thus preserves the capital for the beneficiary.

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