The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: RMD before death? Date:  10/14/2013  11:48 AM
Author:  Wradical Number:  119311 of 127613

Here's why I still believe it's a lousy idea to name a trust as an IRA beneficiary.

If the trust doesn't correctly jump through all the hoops we're back to a non-individual as beneficiary and the 5 year payout. Even if everything's hunky dory with the trust as initially drawn up, things do change. To me it's a lot easier to revise IRA beneficiaries than it is to revise a trust. Cheaper too.


Rule Your Retirement Home Fool

True enough, when you have a suitable beneficiary. But when you have a beneficiary who is a child or a spendthrift or isn't competent (and that could be financially or mentally) then the trust device makes a lot of sense.

And these rules which enable trusts to be used aren't in the Code. These regs. are something IRS put out, as quite a liberal move on their part in 2003. And supposedly that's the exact situation they were trying to facilitate. (I've heard anecdotally from various lawyers who sounded like they knew the history.)

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us