Personal retirement plans are subject to many risks beyond the volatility of investment returns. While volatility is ever-present, it is mitigated by many devices including asset selection, asset allocation, and hedging. The other risks can be even more devastating leading to a complete loss in value: but this loss is a win for someone else. Personal funds set aside for retirement not held in pensions, 401(k)s, or IRAs and the like are subject to complete loss. Lawsuits can attach the values in the non-pension or IRA retirement plans so creditors now own the assets. Taxes can eat away both during accumulation and during payout phases. Death and disability can disrupt the retirement plan during accumulation. Extended care casts can deplete funds completely. Divorce can rear its ugly head with resulting diminishment up to total loss of retirement funds.
Just as asset allocation and other strategies can be employed to manage the risk of volatility, there are specific ways to address these other risks. These methods to strengthen the rights of the retirement plan owner are addressed using what I call the California Liability Limiting Retirement Restructure™ (CaLLRR™ or Section 704 Plan™ ) available only in California. The base structure is a trust designed to address the rights given by the California Code of Civil Procedure §704.115. Layered on this are tax cognizant investment products, insurance protection for death and disability, and language to protect against other contingencies such as divorce and incapacity.The goal is for you, the retiree, to keep what is yours.
I work with advisors for their clients as well as the public directly as part of my financial planning and estate conservation work.
Give me a call at 619-876-6343 or email This email address is being protected from spambots. You need JavaScript enabled to view it. for more details.Thank you.David F. Smith, Ph.D., CFP®, CLU®