April 27, 2016
Beneficiary of Your IRA

Should a Trust be the Beneficiary of Your IRA? Pros and Cons

Should a Trust be the Beneficiary of Your IRA? Pros and Cons For many Americans, the assets in their Individual Retirement Account represent a significant portion of the wealth they hope to leave to their loved ones. You may have heard that creating a trust and naming it as the beneficiary of your IRA is a good way to direct how your assets are distributed after your death and force your heirs to “stretch” the IRA for generations. However, trusts and inherited IRAs are complex vehicles that have a lot of details to get right. Here are some of the pros and cons of naming a trust as a beneficiary of your IRA: Advantages to Naming a Trust as an IRA Beneficiary While directly inheriting an IRA is perfectly fine for many heirs, it can be inappropriate in some situations. Under these circumstances, a trust may be able to help you control how your IRA assets are distributed after you’re gone and help protect your family’s wealth. Protect minor children: If you name minor children or grandchildren as beneficiaries without additional instructions, a guardian will likely be appointed by a court, which can be a complicated and lengthy process and […]