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My husband and I recently set up a trust for our family. We are in the process of changing ownership of assets to the trust, but we are not sure what to do with our IRAs since they need to be in our name. Should we put the trust as a beneficiary?


Yes. Individual retirement accounts and workplace alternatives like 401(k) plans are tied to their individual owners through life and pass on to beneficiaries designated in the plan documents after death. These accounts can’t be included in a will or placed directly into a trust, but you can make a trust your beneficiary, as you suggest. An IRA left in a trust can come in handy when there are minor children, who can’t directly be given retirement account assets, or heirs who are likely to blow the money and so are better off receiving it slowly. A trust also allows assets to be disbursed in a more tax-efficient way. There’s a drawback, however, for someone contemplating setting up a trust solely to receive proceeds from an IRA. Like anything else involving lawyers, the fees can be high. Lawyers have to draw up a trust, and lawyers have to manage it. So a trust created just to hold an IRA may not be such a great idea, but for you the IRAs are one piece of a larger puzzle.

-Conrad de Aenlle