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IRA's and living trust (A B trust)
Jeannette10 08-03-2008, 10:36 PM | Post #2546461 |  5 Replies
4  

Should I list our living trust as a beneficiary of our IRA's ?

Is there an advantage in doing that? Right now we have our 2 children listed as beneficiaries of our IRA's. The rest of our assets is in the name of the trust.

Any input on this topic would be most appreciated.

Jeannette 
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Re: IRA's and living trust (A B trust)
raywax 08-04-2008, 10:50 PM | Post #2546957
1  

Ask your lawyer.

We had an estate plan prepared by an law firm that specializes in serving elder law and it includes an AB Trust. The Trust is the beneficiary; if the specific investment/property title does not list the trust as the primary beneficiary it is not within the trust.

Our trust, and I think this is common to all AB (above ground/below ground) trusts, is such that upon the first death of I or my wife, the survivor can disclaim the what he/she inherits and pass it directly to the secondary beneficiary, which is our children. Thus the children do not have to wait until the death of both of us. With an IRA the investment can then be extended over the life of their adult life expectancy.

But my first sentence is the key; ask you lawyer in your state!

 Ray
Re: IRA's and living trust (A B trust)
meyerr 08-05-2008, 5:47 AM | Post #2547004
0  

It's been quite a while since we made the decisions but feeble memory says Ed Slott, the IRA maven (link) suggests not putting in into the trusts as did our estate attorney.  Apparently putting it into the trusts prevents the beneficiaries from doing the lifetime stretch.  You don't have to disclaim it for the children to stretch it but if you or your spouse had  started RMD's they have to continue at your rate.

Roberta 
Re: IRA's and living trust (A B trust)
Jeannette10 08-05-2008, 10:10 AM | Post #2547100
1  

Thank you, Roberta.

I had forgotten about Ed Slott. I'll see what he has to say on this issue.

The person who did our trust has retired and at this point, I'd rather try to find the information myself before paying $200/hr for a new attorney.

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Re: IRA's and living trust (A B trust)
orygunduck 08-05-2008, 12:23 PM | Post #2547174
2  

Jeanette

From Publication 590, p. 39

"Trust as beneficiary. A trust cannot be a designated beneficiary even if it is a named beneficiary. However, the beneficiaries of a trust will be treated as having been designated as beneficiaries if all of the following are true."

A trust cannot be a designated beneficiary even if it is a named beneficiary. However, the beneficiaries of a trust will be treated as having been designated as beneficiaries if all of the following are true."

The publication then describes 4 qualifying conditions that the trust must meet, that basically make it a pass-through trust with clearly designated beneficiaries. You can see this at

http://www.irs.gov/pub/irs-pdf/p590.pdf

BruceM
Re: IRA's and living trust (A B trust)
Jeannette10 08-05-2008, 2:25 PM | Post #2547226
1  

Thanks, Bruce. I'll check out the link.

Jeannette
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