It’s already quite complex to designate a trust as a beneficiary of your IRA in Pasadena, and unfortunately this isn’t getting any easier. With the demise of defined benefit plans and pensions, it’s certainly becoming more important than ever to discuss the pros and cons of naming a trust as a beneficiary of your IRA in Pasadena.
Over 42.6 million households across the United States have IRAs, with the vast majority of these retirement funds being stored in a traditional IRA. If you intend to leave your IRA behind to a child or a spouse through a trust, it can often be very difficult for those remaining around after you pass away to determine how you wanted it distributed.
In total, there are more than 9.3 trillion retirement dollars stored in IRAs across the country, according to a study completed by the Investment Company Institute.
These funds make up a significant portion of household assets. There are complicated criteria that must be met for the IRS to classify a trust as a look-through or a see-through trust, making the IRA eligible to be paid out over the lifetime expectancy of the beneficiary. Income taxes, trust accounting and minimum distribution rules, all must be taken into account. In order to maximize these options, schedule a consultation with an experienced estate planning law firm in Pasadena today.