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Naming a Trust as Beneficiary of an IRA or Qualified Plan Doesn’t Have to Be Scary

This article is a compliment of  THE LAW OFFICE OF JOHANN CHAU
Written by The American Academy of Estate Planning Attorneys



Often, people think that an individual must be named as the beneficiary of the retirement assets in order to use the beneficiary’s life expectancy and to prevent a forced faster distribution. But, that isn’t the case. A trust may be designated as the beneficiary. As long as the trust meets a few technical requirements, the IRS will look through the trust to its beneficiaries and use their life expectancies. One of those requirements is that the trust must be irrevocable by the death of the Participant. So, for example, if you name somebody else’s revocable trust as the beneficiary and that person survives you, that won’t work. But, if you (the Participant) name your own revocable trust, that would work because your trust becomes irrevocable at your own death.


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