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Sunday, May 21, 2017

IRA Inheritance Trusts

We all worry about how to provide for our loved ones and how they will be supported after we are gone. A well-designed estate plan can bring peace of mind by securing assets to benefit those we hold dear. Estate planning is not just about wills. There are several very useful legal tools that can be put in place to protect the financial future of your loved ones even after you pass away. One such valuable tool is the IRA inheritance trust which can do things such as protect assets from any future creditors your beneficiaries may have.

To establish an estate plan that secures a future you want for your family, contact Keating Law, PLC. Attorney Thomas Keating has 25 years of experience with creating estate plans that serve the best interests of his clients.

IRA Inheritance Trusts and Its Benefits

When you opened an IRA, you probably listed a beneficiary to receive the proceeds of the account should you pass away. Most people name an individual, but another option is to name a trust as the beneficiary. This trust is referred to as an IRA inheritance trust.

Naming an IRA inheritance trust as beneficiary instead of an individual can have several important benefits. If you have any concerns that a person you wish to name as beneficiary may ever file for bankruptcy, an IRA inheritance trust is protected from being effected by this. If you think that the individual beneficiary may have creditors at any point in the future, a trust provides protection from creditors. Future creditors may also include a former spouse as, under the terms of the divorce, they may be entitled to alimony or other payments.

An IRA Inheritance trust also gives you control over how the money is handled by your beneficiary. You might love your grandchild dearly, but might be concerned over their spending habits. If you want to provide financial security for them in the long term, you can place conditions on how the trust distributions should be timed. Instead of a lump sum distribution, your beneficiary can receive distributions over a long period of time. If the beneficiary is a minor, you can also limit access to the money until the beneficiary turns 18.

This type of trust has many benefits, but be aware of the potential tax consequences of establishing an IRA trust. For example, a spouse listed as beneficiary of an IRA receives tax benefits that they would not get if you left the IRA to them in trust. A spouse has the option of rolling over the IRA into his or her own and defer distributions until the age of 70.5. Deferring distributions can make a big difference as the IRA balance has more time to accrue compound interest.

Estate Planning You Can Trust to Secure the Future You Want for Your Family.

Worrying about your family’s future is a lot to carry. Ease this burden with an expertly crafted estate plan. Attorney Thomas Keating has a thorough understanding of the laws of estate planning and uses this to establish estate plans that his clients can rely on. Contact Keating Law, PLC today.


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