Are you thinking of naming a trust as your IRA beneficiary? You might want to reconsider making this move, unless you’re doing it for the right reasons.
While naming a trust as your IRA beneficiary can add protections and provisions for how your hard-earned money is used, it can also make things more complicated and less tax-efficient. It’s almost always more income tax-friendly to have inherited IRA distributions taxed to your trust beneficiaries rather than to the trust itself.
However, if you’re leaving your IRA to a minor or someone that you fear may not be financially responsible, you may want to have some level of post-death control over your money, so you should weigh your options carefully.
To learn more about estate planning and naming your IRA beneficiaries, contact our office at 703-466-0477 to schedule a meeting.
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