Retirement Trust

Do you have an IRA or 401k? If so, you may want to consider a retirement trust as a part of your estate plan.

Many Americans have some type of retirement account. A retirement trust allows you to manage those accounts with distributions after death, controlled in a single document. Retirement trusts provide value to your beneficiaries too because their disbursements from the retirement account are protected against personal creditors of the beneficiaries of the trust. You can capitalize on income tax deferral benefits by stretching out the period for required minimum distributions over the life of your oldest beneficiary. Basically, your retirement account will continue to grow “tax deferred” even after your death. Therefore, creditors cannot reach the principal of the retirement assets.  The taxes otherwise due on the growth of the retirement funds are not collected as swiftly as would be mandated if the required minimum distributions were not otherwise “stretched” out.

Retirement trusts add to an estate plan by focusing on retirement account assets that cannot be retitled to other trust vehicles without a penalty for early withdrawal. Retirement trusts provide instructions to the trustee about the withdrawal requirements for certain retirement accounts.  You can choose a conduit, accumulation, or standalone format when preparing your retirement trust. Deciding which one to use depends on your specific situation and your concerns including the size of the estate plan as well as the ages of the beneficiaries.

In order ensure that you are receiving all the benefits an estate plan has to offer, careful preparation and analysis are essential.  For experienced guidance and superior service, contact The Law Offices of Edward P. Graham in Naperville, IL at (630) 357-2333 or Chesterton, IN at (219) 797-7820.