Trends in Living Trusts Part II

Another trend in Living Trusts, or better said, Estate Planning, are IRA Qualified Trusts. Very often a individual does not want to leave a large IRA to their children or other heirs. The concern is they will cash it in and pay the large tax bill that will surely come when the IRA is liquidated.

One popular option is a special trust that can be the beneficiary of the IRA or other qualified plan. The trust can restrict the distribution of the IRA to over the life expectancy of the loved one. In essence, the heir can have the IRA, enjoy the benefit of the IRA but can only access the IRA over the number of years of their life expectancy. This is a good option for someone that may not be very wise with money or money management.

Note that your basic living trust may not accomplish this same goal and a special IRA trust is required.

If you have any questions, please give us a call at Knollmiller & Arenofsky, LLP.