Individual retirement accounts, or IRAs, can be a useful tool when planning for retirement. IRAs have been around for a long time, relative to some other retirement savings options. The original idea was for employees who had no other option except Social Security old age benefits to have an incentive to put money away for their eventual retirement. Those who have individual retirement accounts may have a considerable amount of money tucked away, potentially more than they will need during their golden years, especially if they have significant wealth or also participate in a pension plan or 401k. Nashville estate planning lawyer Randy Ratliff helps individuals and families evaluate their future needs and formulate an effective estate plan in a particular client’s situation. In some cases, this includes an IRA trust.
A thorough and comprehensive estate plan may include multiple documents and legal vehicles, including not only an IRA trust but possibly other types of trusts designed to effectuate different estate planning goals. A last will and testament and various health care proxies, such as a durable power of attorney for health care and a living will, may also be advisable. Each person’s situation is unique, and the best course of action is to discuss your estate planning goals with an established trusts and estates attorney who can advise you as to your various options and the effect that each will have on you and your loved ones in the future.How Trusts Work for IRAs and Other Assets
In legal parlance, a “trust” is a legal arrangement through which a trustee holds property for the benefit of one or more beneficiaries, and there are different kinds of trusts designed for different kinds of needs. Living trusts, or inter vivos trusts, can be effective during the trustor’s lifetime, while testamentary trusts do not take effect until after the trustor has passed away. Some trusts are revocable, meaning that they can easily be terminated or changed, while others are irrevocable, meaning that they cannot be modified or revoked except in very limited circumstances. Trusts can help both the very wealthy and those with more modest means, depending on an individual’s estate planning goals.
As the name suggests, individual retirement accounts must be owned by an individual. A trust does not qualify as an “individual” and cannot be the record owner of an IRA during the trustor’s lifetime. However, an IRA owner may wish to transfer the assets of his or her IRA to a trust when he or she passes away, rather than have the funds distributed according to a will or intestate succession, which are the rules that govern property disbursement when someone dies without a will. While there can be certain advantages to such an arrangement, an IRA trust is not always advisable, depending upon a particular person’s circumstances. It is important to discuss both the pros and cons of an IRA trust with a knowledgeable trust attorney before going forward with the formation of such a legal vehicle.Talk to an Estate Planning Lawyer Serving Nashville
Residents of Davidson and Williamson Counties, including those in Hermitage, Madison, Goodlettsville, Antioch, Joelton, Brentwood, Franklin, Cool Springs, and Nashville, often have many questions about the best estate planning options for their situation. Attorney Randy Ratliff offers a comprehensive approach to the task of estate planning. We will listen carefully to your concerns, advise you as to what we believe are your best options, answer your questions about the benefits and possible risks of such measures, and help you rest assured that you have taken diligent steps to manage your wealth and provide for the needs of those you will someday leave behind. We also handle family law cases and elder law matters. For an appointment to learn more about our services, or to schedule an appointment to get started on your estate plan, including the drafting of an IRA trust if appropriate, call us at 615-656-8282 or contact us online.