We Serve Clients Throughout Ventura County
Most people don't fully understand what could happen to their retirement plans after they pass away. At Kaiden Elder Law Group, PC, our team of highly skilled and knowledgeable attorneys help clients set up and manage IRA retirement trusts. People often opt to transfer retirement plans via an IRA Retirement Trust for Asset Protection reasons. This is especially important in second marriage situations.
What Is an IRA Retirement Trust?
This type of trust is a specialized trust that can hold and distribute retirement funds for the benefit of the lifetime beneficiary(ies) now, while later making distributions to a different set of beneficiaries. This is especially important for blended families.
Why Do I Need an IRA Retirement Trust?
While leaving a retirement plan to a loved one seems simple because you only need a beneficiary designation form to name a primary or contingent beneficiary, what actually happens to your retirement account(s) after you die might not be what you intended.
For example, your intended beneficiaries might not be named because your beneficiary designation form wasn't updated after a major life event, such as a birth of a child, death in the family, marriage, or divorce.
Another issue with retirement plans is when the funds are left to children who are not ready to handle large sums of money. If IRA funds are left to a minor, a court guardianship will likely be needed as well. What's more is that under the SECURE Act, most beneficiaries can no longer stretch out minimum required distributions over their lifespan. Under this Act, beneficiaries of retirement accounts are required to withdraw retirement funds (and pay taxes) within ten years of inheriting those accounts. But this is not always the case and that's where a specialized trust for retirement accounts can really come in handy.
Other Important Facts About IRA Funds
The Supreme Court ruling in Clark vs. Rameker ruled that inherited IRAs are no longer protected in bankruptcy. The ramifications of this decision reach far and wide. Additionally, divorcing spouses, business partners, foreclosing banks (of your beneficiaries) and others, can potentially attach the inherited retirement accounts.
If you want to provide a certain degree of protection for your children and other beneficiaries, then get in touch with Kaiden Elder Law Group, PC. Our Retirement Trusts offer peace of mind by ensuring that funds are distributed to those you want, not their creditors, nor future unrelated family members.
Call our full-service law firm today at (661) 306-2500, or contact us online to schedule your case consultation.
How Do IRA Retirement Trusts Work?
Besides naming YOUR potential beneficiaries, you can name YOUR trustees, as well as special trustees and trust protectors to run that trust. All these key persons are needed to ensure that the trust runs properly, while retaining as much creditor (and predator, e.g., future ex-spouses) protection as possible. You can also designate exactly how conservative or liberal the distributions from that retirement trust should be, for the benefit of your loved ones.
If you would like to find out more about setting up an IRA Retirement Trust for the benefit of your loved ones, please contact our office to schedule an initial consultation.
