Estate Planning Basics

The ability to pass wealth from one generation to the next is a fundamental right that all people should enjoy. Antonoplos & Associates estate planning attorneys pride themselves on taking the time to learn the goals and objectives of our clients and then integrate them into plans for IRA Beneficiary Trusts.

IRA Beneficiary Trust

An IRA Beneficiary Trust can be the primary or contingent beneficiary of an IRA account (or accounts). The advantage of an IRA Beneficiary Trust is that this account can create “separate shares sub-trusts” which enables the beneficiary of each sub-trust to “stretch” the MRD over his or her life expectancy instead of using only the shortest life expectancy of all possible beneficiaries. Furthermore, this account prevents the immediate withdrawal of the otherwise tax-exempt assets of the IRA by the beneficiary.

In addition, the “Trust Protector” designated in the trust has the power, exercisable up to September 30 of the year following the client’s death, to convert a sub-trust from a “conduit trust” to a fully discretionary “accumulation trust”; to maximize the MRD tax benefits, the Trust Protector also has the power, in the same time frame, to change the potential contingent beneficiaries (other than the primary beneficiary and/or the client’s issue). This power to convert can be very important when other considerations may make the discretionary power to accumulate more important than the maximum stretch-out of the MRD; for example, a child’s creditor problems, a divorce, the disability of a child (including drugs or alcohol), severe fiscal mismanagement, etc.

For more information regarding tax or trust information, schedule a consultation with one of our experienced attorneys or check out our blog.