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IRA trust

Stop Naming Trusts as IRA Beneficiaries!

Yes, trusts can play an instrumental role in estate planning. Yes, special needs trusts are invaluable to those with disabled or chronically ill family members. Trusts are essential for minors and for those who may struggle with managing money. Trusts also allow for post-death control of assets. But they are not for everyone, nor are they a panacea when it comes to estate planning…especially with IRAs. I continue to pound my head on the desk every time I encounter a trust unnecessarily named as an IRA beneficiary. Why did the IRA account owner name the trust? Bad advice? Was he simply trying to keep up with the Jones’ who bragged about their trust? Did he read someplace that all trusts are great? Was he intentionally trying to make things difficult for his IRA beneficiaries? Sadly, “making things difficult” is oftentimes the unintended result.

Seven Ways the IRS Knows…

It’s not a good question to be asking, and it’s certainly not the right question to be asking, but one fairly common question asked by both advisors and clients is “How are they going to know?” The “they,” they’re referring to, is the IRS. For those that have ever wondered, here are the answers to seven common “How are they going to know” questions.

What Now? A Widow's Story About Making the Right Financial Decisions

In 2006, Alan, a strapping young man who had just turned 50, collapsed and died of a massive heart attack while attending Sunday morning Mass with his wife Karen. Alan and Karen co-owned a business. Alan was a contractor and Karen handled the accounting and billing. Karen was fairly savvy financially. However, because she felt she had to get everything settled “right away” after Alan’s passing, she made several costly mistakes. It's a story you and your clients can learn from.

Whose Trust Should Be Your IRA Beneficiary?

Consider a typical scenario. There is a married couple, Peggy and Tom, and both have their own revocable trust. They also each have their own retirement accounts. It is frequently recommended that individuals name a trust as the beneficiary of their retirement accounts. We will assume that it is necessary for Peggy and Tom to do this. Whose trust should they name as the beneficiary?

Important October IRA Deadlines

There are two important dates in October, the 15th and the 31st. Read on to learn more about these deadlines and dates to put on your calendar.

IRA Trustee Must Know Answers to These 15 Questions

In most cases, an IRA owner who names a trust as the beneficiary of their IRA names either the spouse or a child as the trustee of the trust. This may not be the best option, especially if they cannot answer the following 15 questions.

Who Pays the Tax on Inherited IRA Distributions If You Leave Your IRA to a Trust?

For a variety of reasons, you might be considering naming a trust as your IRA beneficiary. If that’s the case, then chances are that you have questions about how, exactly, that would work. One of the most common questions people have when they name a trust as their IRA beneficiary is, “Who will pay the tax on the inherited IRA distributions? The trust, or the trust beneficiaries?” We answer that question in this article.

Can I Place My IRA in a Trust?

This week's Slott Report Mailbag includes questions about placing an IRA in a trust, what to do with 401(k) funds from a previous employer and the nuts and bolts of the Roth IRA 5-year rules.

Just Another Reason to Check Your Beneficiary Forms

We are all going to die someday. That is pretty much guaranteed. What is not guaranteed is who is going to inherit our “stuff?” We can use a will, a trust, and beneficiary forms. This story is about a man who did not use his beneficiary form.

What Are My Options For Naming a Trust as IRA Beneficiary for a Minor Grandchild?

This week's Slott Report Mailbag looks at the logistics of naming a trust as IRA beneficiary for minor children and strikes down a common mistake made by employer plans when dealing with employer plan distributions rolled over to an IRA.

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