When you’re doing estate planning in New York, you’re planning for your future and the future of your family members. If you’re using an IRA for your retirement, there are a few things you must know.

First, there are required minimum distributions, which means you do not have full control over how much you take out of the account. You can withdraw more — if you just want to take it all out and leave it to your son or daughter, for example — but you then have to pay roughly 50 percent in taxes. Additionally, your IRA may be subjected to an estate tax, even if you leave the account to your heirs.

So, how do you get this money to them without most of it being eating up by the government? One tactic is to start taking action early, around the time you turn 60. You can only take so much out without penalty, so as long as you have other financial options for retirement, take that money and use it to pay for a life insurance policy.

The size of the policy depends on how much you can afford, but you’re basically buying it with money you don’t need anyway. You avoid the penalties and invest in a policy that will pay out when you pass away. This way, your heirs get the money from the policy, which was created directly by your IRA, without the penalty, so you both win.

Estate planning can be complicated, especially when it comes to taxes and retirement accounts, and it’s very important to know all of your options.

Source: Forbes, “The RMD Choice: Take A 50% Tax Penalty Or Leave A Family Legacy,” Steve Parrish, March. 23, 2015