Weekly Scenario: Retirement Accounts and Life Insurance
Question: Can an Individual Retirement Account, or IRA, own a life insurance policy?
Answer: No, IRAs are not permitted to own or hold a life insurance policy. It is one of the few investments that are prohibited in an IRA.
Comment: It is important to be careful with ‘non-cash’ related investments inside an IRA. For example, some people own real estate in their IRAs, but it is important to be careful with real estate (and certain other assets as well) because it is easy to jeopardize the IRA itself and cause adverse tax consequences.
As always, if you have any questions or would like to learn more, please contact Steve Shane at firstname.lastname@example.org or .
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Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
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