Trust as Beneficiary
In past newsletters, Ed says that naming a Trust as beneficiary is a no no……..Because it causes an immediate taxable event on the entire amount of the I.R.A.
Should the Trust be named as beneficiary when minor children are involved as stated in tne November newsletter?
Permalink Submitted by Bruce Steiner on Thu, 2007-11-01 02:51
Unless the amount involved is too small too warrant administering a trust, we generally recommend that clients provide for their children in trust rather than outright, to better protect the inheritance against the child’s potential creditors (including spouses), and to keep the inheritance out of the child’s estate for estate tax purposes.
These reasons apply to IRAs in the same way as for other assets.
So, unless the amount involved is too small to warrant administering a trust, we generally recommend that clients leave their IRAs to their children in trust rather than outright, regardless of the age of the children.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL