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Author: criser Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Re: Inclusion of IRA account in a Living Trust Date: 1/22/2000 11:49 AM
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I have seen this issue a couple of times and although there are always "all things" to consider -- It has been recommended that since the IRA has a direct beneficiary and therefore it already avoids probate (one of the main objective of living trusts), it is not appropriate to include it in your trust, but if you want the proceeds to be split within your trust rather than going directly to the name beneficiary, you can name the trust as the beneficiary and then the proceeds get distributed within the trust's provisions.

It is true that a trust can be named as beneficiary of an IRA, but this is a complex and new area (regs were issued only recently, and they must be followed carefully or you could have a tax disaster on your hands. Naming a trust (living trust or otherwise) as IRA beneficiary will require a separate custom-drafted beneficiary designation (not just writing in "John Doe Revocable Trust" on the IRA custodian's boilerplate form beneficiary designation) and is definitely not a do-it-yourself situation (neither is establishing a living trust, for that matter...). See an estate planning attorney. Make sure he or she is VERY familiar with the regs in this area and has experience with custom-drafted beneficiary designations.

Chris Riser
criser@mayer-riser.com
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