2010 Rules for Roth IRAs

Beginning January 1, 2010, the income and filing status requirements for rollovers (including conversions) to a Roth IRA was eliminated. Additionally, for rollovers to a Roth IRA in 2010 only, a special 2-year option for reporting taxable portions of your rollover apply.

Under the new rules, regardless of your income or filing status, you can roll over (convert) the following to a Roth IRA:

• Your traditional individual retirement arrangement (IRA), SEP IRA or SIMPLE IRA;
• an Eligible rollover distribution (ERD)- For example, a 401(k) or a 403(b) plan; or
• an ER from a retirement plan for which you are a beneficiary.

For rollovers and conversions to a Roth IRA in 2010 only, you have the option of reporting the taxable portion of your rollover in your gross income for 2010, or reporting half in 2011 and half in 2012.

Previously, to roll over to a Roth IRA, both of these requirements needed to be met; your modified AGI was less than $100,000 and your filing status was not married filing separate.

For additional information on the effect of the 2010 changes on your retirement accounts, please contact us.

Events Requiring An Estate Plan Update

Generally speaking, your estate plan should be reviewed every two years to determine whether it needs to be changed or updated.

Additionally, if any of the following events occur, you'll probably need to update your estate plan (i.e., your will, health care documents, powers of attorney, life insurance coverage, and post-mortem letters).

• Divorce
• Marriage or remarriage
• Birth/adoption of child
• Death of spouse or child
• Sale of residence or purchase of new residence
• Retirement
• Enactment of new tax laws

Tip: We suggest that you consult with the professional who prepared your estate plan should any of these events occur.

Here are some of the steps you may need to take:

1. Change an executor,
2. Revise a will to account for an increase in assets,
3. Reassess your life insurance needs,
4. Add or change a power of attorney,
5. Change legal documents to comport with state laws if you move to a different state,
6. Change wills or trust instruments to account for changes in beneficiaries, or
7. Change your post-mortem letter to reflect new assets, changes in executors, or other changes.

Tip: Because of the recent changes to the estate tax laws, many estate plans may need to be revised.