Trust as bene’s for IRA?
An estate planning attorney has recommended that the client’s Rev Trust be the contingent bene of their IRA’s
Clients live in Florida
The client’s children are all mid-20s and on their way to successful careers.
The clients are late 60’s.
Also recommended making the trust the contingent bene on their life insurance as well.
Frankly doesn’t make sense to me.
Thoughts?
Permalink Submitted by Bruce Steiner on Wed, 2024-04-24 19:40
You are correct. Unless the proposed beneficiary designation is a formula that’s too complicated to administer, or too complicated for a custodian to accept, it would make more sense to name the children (or, preferably, the trusts for the children under the Will or under the revocable trust) as the contingent beneficiaries. There’s no purpose to running the IRA benefits through the revocable trust which is merely an administrative trust.
Also, probating a Will is generally not difficult, expensive or burdensome. I’m admitted in Florida and have probated many Wills throughout Florida. Why is he/she recommending a revocable trust?
(The exception would be that since Florida requires a personal representative to be either a relative or a Florida resident, if the person you want isn’t a relative or a Florida resident, a revocable trust is a workaround.)
Bruce Steiner