There are many different types of effective trusts for accomplishing specific things in retirement and estate planning. Unfortunately, many people don’t ever consider using a trust because of the perception that they are only for the ultra wealthy. Actually, trusts are used by millions of people who just simply care about what happens to their wealth both during and after their lifetime. So, are you trustworthy?
Because of all the rule and distribution changes made to IRAs and other types of retirement accounts over the last several years, one specific Trust has become a lot more popular and effective. This is the Inherited IRA Trust. It is a special trust that is designed to hold your IRA accounts for the benefit of your loved ones following your death. The two major benefits of the IRA Trust is protection and control.
Many times, an IRA is one of the largest assets passed on to beneficiaries. Unfortunately, the inheritance of such large sums of money by children or other heirs can cause many problems. There was a Supreme Court ruling recently that ruled Inherited IRAs are not protected from bankruptcy. There is also concern by many people over losing an Inherited IRA to creditors, divorce, taxes, or reckless spending. So, many IRA owners to look for ways to safeguard this money for their heirs.
An IRA Trust offers protection against these issues as well as the ability for the owner to maintain some control of the account and the payout, even after they pass away. Thus, the IRA Trust can be a very valuable tool in certain circumstances.