Although you are permitted to name anyone or anything as the beneficiary of an Individual Retirement Account (IRA), there are many pitfalls that must be avoided. Naming a Trust as the beneficiary of an IRA is an important estate planning opportunity, but the Trust and the beneficiary designation language must be drafted properly to insure that the beneficiaries can receive maximum available tax deferral. I have the opportunity to see the mistakes that individuals make with their estate planning documents and beneficiary designations and know that these mistakes can cause hundreds of thousands of dollars of loss. The IRA Trust terms such as “stretch out”, “Measuring Life”, “conduit Trust” and “See Through Trust” can be confusing and complex.
Read this article by Natalie Chaote to get a better understanding of the issues faced when naming a Trust as IRA beneficiary. While you are at it, check out this Natalie Choate IRA article here for some another interesting fact pattern
Contact Douglas L. Kaune, Esq. to review your estate planning and particular IRA beneficiay designation concerns and desires. We can then determine how best to approach this complex legal issue.