Why would an IRA account owner want to name a trust or non-person as their beneficiary? One type of frequently used trust is call a “see-through” trust. It creates a mechanism for the deceased to control account withdrawals, post-death. In addition a see-through trust allows the underlying beneficiary to stretch distributions over their life expectancy. Prior to naming a trust as a beneficiary an investor needs to be aware of the complex rules that govern trusts. You also must name your trust as a beneficiary on the IRA beneficiary designation form or other form acceptable to the IRA custodian.
Estate Planning Articles
Dec 8
Naming a Trust
Dec 8
Estate Taxes
IRS has finally issued the carryover basis form for large estates…Form 8939. Estates of individuals who died in 2010 can elect to pay no estate tax, but the heirs are stuck with the decedent’s tax basis for inherited assets, with a basis step-up of $1.3 million and $3 million more for surviving spouses. Executors use the 8939 to report allocations of the basis step-up to the heirs and to the Revenue Service. The agency said last month that executors have until January 17, 2012, to file the form.
Mar 28
Who will get my IRA assets?
In order to avoid huge headaches for your heirs, it is important that you pay attention to whom you name as your IRA beneficiary. It is important to sync what is on your beneficiary designation form with information that is spelled out in your estate documents. What is on a beneficiary designation trumps what is in your will. Be careful to make tax efficient use of your IRA assets and not to make minor children or your estate beneficiary of an IRA.
Roth IRAs have become a great estate planning tool. Previously, conversion from a regular IRA or 401(k) was simply prohibited for taxpayers with incomes in excess of $100,000. Under new legislation passed by Congress, everyone can convert a regular IRA to a Roth IRA.