Trusts as Retirement Plan Beneficiaries 2022

Overview

Often trusts are named as beneficiaries for Individual Retirement Accounts and other retirement arrangements. The choice has an impact on both income tax and estate planning. Trusts allow the IRA owner or plan participant to have beyond-the-grave control over the distribution payouts.

Highlights

• What is the significance of the retirement plan beneficiary? • Primary vs. contingent beneficiaries • Is a trust a “designated beneficiary?” • Why do people want to name a trust as the beneficiary? • Income tax aspects of trusts as beneficiary • What happens when the trust beneficiary dies?

Objectives

• Recognize reasons trusts are named as beneficiaries • Identify the types of trusts used and their tax characteristics. • Determine how the probate code affects beneficiary trusts. • Develop strategies to assist clients dealing with plan custodians.