Barnes Lipscomb & Stewart PLLC

How Bad Will Your Estate’s Taxes Be?

“There were only approximately 1,900 taxable estates in the U.S. in 2018, which is less than 0.1 percent of people who died that year.”

The federal estate tax has been a small but steady source of federal revenue for nearly 100 years. The tax was first imposed on wealthy families in America in 1916. They were paid by families whose assets were previously passed down through multiple generations completely and utterly untaxed, says the article “Will the government tax your estate when you die, seizing home and assets?” from The Orange County Register.

The words “Death Tax” don’t actually appear anywhere in the federal tax code, but was the expression used to create a sympathetic image of the grieving families of farmers and small business owners who were burdened by big tax bills at a time of personal loss, i.e., the death of a parent. The term was made popular in the 1990s by proponents of tax reform, who believed that estate and inheritance taxes were unfair and should be repealed.

Fast forward to today—2020. Will the federal government tax your estate when you die, seize your home and everything you had hoped to hand down to your children? Not likely. Most Americans don’t have to worry about estate or death taxes. With the new federal exemptions at a record high of $11,580,000 for singles and twice that much for married couples, only very big estates are subject to a federal estate tax. Add to that, the 100% marital deduction means that a surviving spouse can inherit from a deceased spouse and is not required to pay any estate tax, no matter how big the estate.

However, what about state estate taxes? To date, thirteen states still impose an estate tax, and many of these have exemptions that are considerably lower than the federal tax levels. Six states add to that with an inheritance tax. That’s a tax that is levied on the beneficiaries of the estate, usually based upon their relationship to the deceased.

Many estates will still be subject to state estate taxes and income taxes.

The personal representative or executor is responsible and legally authorized to file returns on a deceased person’s behalf. They are usually identified in a person’s will as the executor of the estate. If a family trust holds the assets, the trust document will name a trustee. If there was no will or trust, the probate court will appoint an administrator. This person may be a professional administrator and likely someone who never knew the person whose estate they are now in charge of. This can be very difficult for family members.

If the executor fails to file a return or files an inaccurate or incomplete return, the IRS may assess penalties and interest payments.

The final individual income tax return is filed in just the same way as it would be when the deceased was living. All income up to the date of death must be reported, and all credits and deductions that the person is entitled to can be claimed. The final 1040 should only include income earned from the start of the calendar year to the date of their death. The filing for the final 1040 is the same as for living taxpayers: April 15.

Even if taxes are not due on the 1040, a tax return must be filed for the deceased if a refund is due. To do so, use the Form 1310, Statement of a Person Claiming Refund Due to a Deceased Taxpayer. Anyone who files the final tax return on a decedent’s behalf must complete IRS Form 56, Notice Concerning Fiduciary Relationship, and attach it to the final Form 1040.

If the decedent was married, the widow or widower can file a joint return for the year of death, claiming the full standard deduction and using joint-return rates, as long as they did not remarry in that same year.

An estate planning attorney can help with these and the many other details that must be taken care of, before the estate can be finalized.

Reference: The Orange County Register (March 1, 2020) “Will the government tax your estate when you die, seizing home and assets?”

Estate Planning Is For Everyone

“The most common misconception estate planning attorneys hear, is that someone doesn’t need an estate plan because their client isn’t elderly or on death’s door.”

Estate planning is something anyone who is 18 years old or older needs to think about, advises the article “Estate planning for every stage of life” from the Independent Record. Estate planning includes much more than a person’s last will and testament. It protects you from incapacity, provides the legal right to allow others to talk to your doctors if you can’t and takes care of your minor children, if an unexpected tragedy occurs. Let’s look at all the ages and stages where estate planning is needed.

Parents of young adults should discuss estate planning with their children. While parents devote decades to helping their children become independent adults, sometimes life doesn’t go the way you expect. A college freshman is more concerned with acing a class, joining a club and the most recent trend on social media. However, a parent needs to think about what happens when the child is over 18 and has a medical emergency. Parents have no legal rights to medical information, medical decision making or finances, once a child becomes a legal adult. Hospitals may not release private information and doctors can’t talk with parents, even in an extreme situation. Young adults need to have a HIPAA release, a durable power of medical attorney and a power of attorney for their finances created.

New parents also need estate planning. While it may be hard to consider while adjusting to having a new baby in the house, what would happen to that baby if something unexpected were to affect both parents? The estate planning attorney will create a last will and testament, which is used to name a guardian for any minor children, in case both parents pass. This also includes decisions that need to be made about the child’s education, medical treatment and even their social life. You’ll need to name someone to be the child’s guardian, and to be sure that they will raise your child the same way that you would.

An estate plan includes naming a conservator, who is a person with control over a minor child’s finances. You’ll want to name a responsible person who is trustworthy and good with handling money. It is possible to name the same person as guardian and conservator. However, it may be wise to separate the responsibilities.

An estate plan also ensures that your children receive their inheritance, when you think they will be responsible enough to handle it. If a minor child’s parents die and there is no estate plan, the parent’s assets will be held by the court for the benefit of the child. Once the child turns 18, he or she will receive the entire amount in one lump sum. Few who are 18-years old are able to manage large sums of money. Estate planning helps you control how the money is distributed. This is also something to consider, when your children are the beneficiaries of any life insurance policies. An estate planning attorney can help you set up trusts, so the monies are distributed at the right time.

When people enter their ‘golden’ years—that is, they are almost retired—it is the time for estate plans to be reviewed. You may wish to name your children as power of attorney and medical power of attorney, rather than a sibling. It’s best to have people who will be younger than you for these roles as you age. This may also be the time to change how your wealth is distributed. Are your children old enough to be responsible with an inheritance? Do you want to create a legacy plan that includes charitable giving?

Lastly, update your estate plan any time there are changes in the family structure. Divorce, death, marriage or individuals with special needs all require a different approach to the basic estate plan. It’s a good idea to revisit an estate plan anytime there have been major changes in your relationships, to the law, or changes to your financial status.

Reference: Independent Record (March 1, 2020) “Estate planning for every stage of life”

Surprising Ways Beneficiary Designations Can Damage an Estate Plan

“During the estate planning process, these beneficiary designations are reviewed to ensure that the beneficiaries are correct, and that the distribution of these assets conforms with the client’s intended estate plan.”

Naming a beneficiary on a non-retirement account can result in an unintended consequence—it can even topple an entire estate plan—reports The National Law Review in the article “Overuse of Beneficiary Designations: How They Can Derail a Client’s Estate Plan.” How is that possible?

In most cases, retirement accounts and life insurance policies pass to beneficiaries as a result of the beneficiary designation form that is completed when someone opens a retirement account or purchases a life insurance plan. Most people don’t even think about those designations again, until they embark on the estate planning process, when they are reviewed.

The beneficiary designations are carefully tailored to allow the asset to pass through to the heir, often via trusts that have been created to achieve a variety of benefits. The use of beneficiary designations also allows the asset to remain outside of the estate, avoiding probate after death.

Apart from the beneficiary designations on retirement accounts and life insurance policies, beneficiary designations are also available through checking and savings accounts, CDs, U.S. Savings Bonds or investment accounts. The problem occurs when these assets are not considered during the estate planning process, potentially defeating the tax planning and distribution plans created.

The most common way this happens, is when a well-meaning bank employee or financial advisor asks if the person would like to name a beneficiary and explains to the account holder how it will help their heirs avoid probate. However, if the estate planning lawyer, whose goal is to plan for the entire estate, is not informed of these beneficiary designations, there could be repercussions. Some of the unintended consequences include:

Loss of tax saving strategies. If the estate plan uses funding formulas to optimize tax savings by way of a credit shelter trust, marital trust or generation-skipping trust, the assets are not available to fund the trusts and the tax planning strategy may not work as intended.

Unintentional beneficiary exclusion. If all or a large portion of the assets pass directly to the beneficiaries, there may not be enough assets to satisfy bequests to other individuals or trust funds created by the estate plan.

Loss of creditor protection/asset management. Many estate plans are created with trusts intended to protect assets against creditor claims or to provide asset management for a beneficiary. If the assets pass directly to heirs, any protection created by the estate plan is lost.

Estate administration issues. If a large portion of the assets pass to beneficiaries directly, the administration of the estate—that means taxes, debts, and expenses—may be complicated by a lack of funds under the control of the executor and/or the fiduciary. If estate tax is due, the beneficiary of an account may be held liable for paying the proportionate share of any taxes.

Before adding a beneficiary designation to a non-retirement account, or changing a bank account to a POD (Payable on Death), speak with your estate planning attorney to ensure that the plan you put into place will work if you make these changes. When you review your estate plan, review beneficiary designations. The wrong step here could have a major impact for your heirs.

Reference: The National Law Review (Feb. 28, 2020) “Overuse of Beneficiary Designations: How They Can Derail a Client’s Estate Plan”

Tax Planning in Your Retirement Planning

“Assuming you have income in retirement, you will be subject to at least some income taxes in your golden years.”

Once you are retired, the only tax you won’t have to pay will be—can you guess? Yes, payroll taxes. However, there are plenty of other taxes to be paid, advises Forbes in the article that answers the question “What Taxes Will I Owe In Retirement?”

People who are accustomed to having employers handle income taxes throughout their working lives, are often surprised when they learn that not working does not mean you’re not paying taxes. Income is taxable, whether you are working or not. You won’t have to pay into Social Security when you retire, and Medicare becomes a premium, not a deduction from your paycheck. However, there are still taxes to be paid.

Federal income taxes range from 10 to 37 percent, depending on your income bracket and marital status. Pensions, annuities, IRA withdrawals, defined benefit plans, 457 or any other pre-tax retirement accounts will generate tax liabilities.

Is any income tax-free in retirement? Withdrawals from Roth IRAs are tax free, since you paid tax on the money before it went into these accounts. The same goes for the Roth 401(k)s.

Are there taxes on Social Security? Approximately 60% of retirees won’t owe federal income taxes on Social Security benefits. However, your Social Security benefits might be taxed, depending upon your retirement income. This tax also varies depending upon where you live. Some states tax Social Security benefits, others do not. Rental income and royalties are also counted as income.

Consumer taxes. Sales tax and property taxes will still need to be paid. For many people, property taxes are their highest tax expenses.

Is there a tax on Medicare? The Medicare Surtax, also known as the Unearned Income Medicare Contribution Surtax or NIIT, is a 3.8% Medicare tax that applies to income from investments and regular income above specific thresholds. For 2020, if you have MAGI (Modified Adjusted Gross Income) above $200,000 ($250,000 for married couples filing jointly), you will have to pay NIIT. This is one that most people don’t know about, and can add up quickly, especially if you have great market returns and realized gains.

With good planning, you may be able to replace 100% or more of your pre-retirement income. In many cases, it may mean paying about the same amount in taxes as you did while working. If you do a good job of saving and have a large income during retirement, you will most likely end up paying at least some taxes on retirement income. It’s a good problem to have, but still a problem.

All of these retirement taxes add up to quite a nice tax bite, if you are not prepared for them. This is another example of how advance tax planning can make a big difference in the quality of your retirement.

Reference: Forbes (Feb. 23, 2020) “What Taxes Will I Owe In Retirement?”

What is the Difference between Guardianship and Power of Attorney?

“With all the media buzz about guardians stealing money from those whom they are meant to protect and overall financial abuse issues involving seniors, it’s a good moment to revisit how surrogate decision-making works.”

Protecting yourself or a loved one can take many different forms, since aging takes a toll on the ability to handle financial and medical decisions. In most situations, guardianship or a power of attorney does the trick, says the article “Guardianships vs. Powers of Attorney” from the Pittsburgh Post-Gazette.  How to know which is the best one to use?

A guardianship is a court-authorized assignment of surrogate decision-making power for the benefit of a person who has lost the ability to make informed decisions on their own, often described as a person who has become incapacitated. The decisions that another person can make on their behalf can be very broad, or they can be very specific.

If a person becomes incapacitated, either through a slowly progressing illness like dementia or quickly, as the result of an accident, a judge will appoint a person or sometimes an organization to handle health care and financial decisions. The court-appointed guardian or organization could be a person or agency you have never heard of and would not know your family or anything about you.

Yes, that is scary. However, guardianship takes place when families do not plan in advance to appoint a surrogate decision maker, also known as an “agent.”

Here’s even more scary news: once the court has appointed a guardian, that relationship may continue for the rest of the incapacitated person’s life. That means annual accountings and involvement with the court, legal fees and other professional fees the guardian or court deems necessary.

There are some guardians who have made headlines for stealing money and making care decisions that the individual and their families did not want.

Meeting with an estate planning attorney to prepare for incapacity as part of an overall estate plan is a far better way. Why don’t more people do it?

• They aren’t aware of the importance of power of attorney.
• They don’t want to spend the money.
• They don’t know who to choose as their power of attorney
• They don’t want to think about incapacity or death.

In contrast to a court-supervised lifetime guardianship, a properly drafted power of attorney can provide for an agent to make a variety of financial and medical decisions. The person named as a power of attorney (the agent) can serve for the person’s lifetime, just like a guardian.

This is the most fundamental estate planning document, after the last will and testament. Once it’s prepared, you can always change your mind and you or your agent never need to go to court.

Reference: Pittsburgh Post-Gazette (Feb. 24, 2020) “Guardianships vs. Powers of Attorney”

Do You Need a Revocable Trust?

A will lets you determine how your property will be distributed when you die, and a revocable living trust also accomplishes that task. However, the owner of the trust can make strict stipulations about how specific assets should be distributed, says Barron’s in the article “Revocable Living Trusts Can Help Your Heirs Avoid Probate. Here’s How They Work.” Another advantage of a revocable trust—avoiding probate, which gives the trust owner far more control over asset distribution.

Remember, probate is a process that takes place under the supervision of a judge in a court. Things don’t always happen the way the decedent may have wanted.

It’s best for individuals or couples with complex estate planning needs to meet with an estate planning lawyer, who will discuss whether a living trust is the right option. One question couples should ask: does it make sense for them to have a living will, and should it be a joint trust, or should it be two separate ones?

When a trust is created, it needs to be funded. Assets such as real estate, bank accounts, taxable non-retirement investment accounts all need to be retitled so they are owned by the trust. The person who creates the trust has no restrictions as to how the assets within the trust are used while they are alive. The trust can also be revoked during the owner’s lifetime, but it’s more common for owners to make tweaks to the trust.

Trusts are very popular in states like California and Massachusetts, which have more restrictive probate laws than other states. Trusts are very good for people who own property in multiple states and would otherwise have to deal with probate in multiple states. Trusts are also excellent for people who wish to maintain privacy about their assets, since the trust’s contents remain private. A will, once it enters the probate process, becomes a public document.

Someone who does not own his or her own home and has limited assets may prefer to use a will, which is less expensive and simpler than a trust. Once they do own a home and have more extensive assets, they can always have a trust created.

A living trust is part of a larger estate plan. Other estate planning documents are still needed, including a durable power of attorney for finances, an advance health care directive, a nomination of guardianship for families with minor children and a living will.

People who have revocable trusts should ask their estate planning attorney about something called a “pour-over” will. This is a will that ensures that any assets accidentally left out of the trust are added to the trust after the death of the owner. If the majority of assets are in the trust, the probate of the pour-over will should be much simpler and there may even be a “fast-track” option for assets under a certain dollar level.

Reference: Barron’s (February 22, 2020) “Revocable Living Trusts Can Help Your Heirs Avoid Probate. Here’s How They Work”

Your Estate Plan is a “Dynamic Document”

“Failing to ensure that your asset titling and beneficiary designations are coordinated with your estate plan, can lead to unintended costs, taxes and outcomes.”

One of the most common mistakes people make about their estate planning is neglecting to coordinate all of the moving parts, reports the Dayton Business Journal’s article “Baird expert gives estate planning advice.” The second most common mistake is not thinking of your estate plan as a dynamic document. Many people believe that once their estate plan is done, it’s done forever. That creates a lot of problems for the families and their heirs.

In the last few years, we have seen three major federal tax law changes, including an increase in the federal estate tax exemption amount from $3,500,000 to an enormous $11,580,000. The estate tax exemption is also now portable. Most recently, the SECURE Act has changed how IRAs are distributed to heirs. All of these changes require a fresh look at estate plans. The same holds true for changes within families: births, deaths, marriages and divorces all call for a review of estate plans.

For younger adults in their 20s, an estate plan includes a last will and testament, financial power of attorney, healthcare power of attorney and a HIPAA authorization form. People in their 40s need a deeper dive into an estate plan, with discussions on planning for minor children, preparing to leave assets for children in trusts, ensuring that the family has the correct amount of life insurance in place, and planning for unexpected incapacitation. This is also the time when people have to start planning for their parents, with discussions about challenging topics, like their wishes for end-of-life care and long-term care insurance.

In their 60s, the estate plan needs to reflect the goals of the couple, and expectations of what you both want to happen on your passing. Do you want to create a legacy of giving, and what tools will be best to accomplish this: a charitable remainder trust, or other estate planning tools? Ensuring that your assets are properly titled, that beneficiaries are properly named on assets like life insurance, investment accounts, etc., becomes more important as we age.

This is also the time to plan for how your assets will be passed to your children. Are your children prepared to manage an inheritance, or would they be better off having their inheritance be given to them over the course of several years via a trust? If that is the case, who should be the trustee?

Some additional pointers:

• Revise your estate plan every three or five years with your estate planning attorney.
• Evaluate solutions to provide tax advantages to your estate.
• Review asset titling and beneficiary designations.
• Make sure your charitable giving is done in a tax efficient way.
• Plan for the potential tax challenges that may impact your estate

Regardless of your age and state, your estate planning attorney will be able to guide you through the process of creating and then reviewing your estate plan.

Reference: Dayton Business Journal (February 4, 2020) “Baird expert gives estate planning advice”

How Do ABLE Accounts Work?

“ABLE accounts can be powerful financial tools for those living with a disability. Here's how they work.”

It took nearly a decade of lobbying, but in 2014, Congress passed the Achieving a Better Life Experience Act. The law, referred to as ABLE, lets people with disabilities open a tax-advantaged account, similar in many ways to 529 accounts used to help with college funding. ABLE accounts are explained in the article “Everything You Need to Know About ABLE Accounts” from U.S. News & World Report.

The accounts allow eligible individuals to save money without putting their eligibility for government benefits at risk. The income from the account is not used for means testing for Social Security Income or Medicaid.

However, despite these benefits, ABLE accounts are still not widely used. Less than 57,000 accounts have been opened nationwide. Here’s more information on how they work.

Why would a disabled person want an ABLE account? Living with any type of disability is costly. There are out-of-pocket expenses for transportation, housing, and education that may not be covered by government programs. Those programs limit a person’s assets to $2,000. Prior to the ABLE Act becoming law, that meant that a disabled person could not save money for their own use. While there are limits to the size of ABLE accounts, they provide an opportunity for a financial cushion.

Who is eligible for an ABLE account? A person who became blind or disabled before age 26 may be the beneficiary of an ABLE account. Someone who is receiving SSI or Social Security Disability benefits is automatically eligible to open an account. Others will need to meet Social Security’s definition of being disabled and have a doctor’s letter stating that they are disabled to qualify.

Do all states offer ABLE accounts? There are 42 states, plus the District of Columbia, that offer ABLE Accounts. But a disabled resident of a state that does not offer ABLE accounts can open one with another state’s program. Right now there are 26 states that let anyone open an account, and the rest limit their programs to state residents. An estate planning attorney will know what your state’s rules are.

Are there tax incentives for using an ABLE account? This varies by state. Michigan and Arkansas let single filers deduct $5,000 in contributions to an ABLE account on their state tax forms. For joint filers in these two states, the maximum deduction is $10,000. In Illinois, there is a state income tax deduction of $10,000 for a single filer and $20,000 for joint filers. For Kansas, deductions are smaller; $3,000 for individuals and $6,000 for couples. New York State and California do not allow any deductions.

How much can be contributed to an ABLE account? $15,000 a year is the limit for annual contributions. Be aware that the first $100,000 of an account’s balance is shielded from asset means testing for government programs. Once the account reaches $100,001, it could impact SSI benefits.

What expenses can the ABLE account be used for? The account is designed to be used by people with disabilities, so things like medical treatment, transportation, education, and assistive technology are permitted uses. The expense must be related to a person’s disability.

Does it cost anything to open an ABLE account? This varies by state. In Ohio, you’ll pay $30 to open an account if you are a resident; out of state fees are $42 annually. In New York, only residents can open accounts, and the fee is $45 to open an account online and $55 if it is done on paper by mail.

Should a Special Needs Trust be used instead of an ABLE account? Many families chose a Special Needs Trust instead of an ABLE account. These trusts cost more to setup, but also offer more flexibility. They once were the only option. An estate planning elder law attorney will be able to guide the family as to which is the best solution for their disabled family member.

Reference: U.S. News & World Report (February 18, 2020) “Everything You Need to Know About ABLE Accounts”

Should You Move Your 401(k) to A Roth?

“Research shows that moving 401(k)s to after-tax contributions would boost tax returns in the short term, but leave retirees worse off.”

Overhauling the retirement savings system is the subject of considerable talk in Washington these days, with the focus on how to give an immediate boost to government tax revenues. With retirement fund accounts being measured in the trillions, it’s no surprise that they are being eyed.

One of the ideas being discussed, according to the article “What ‘Rothifying’ 401(k)s Would Mean for Retirees” from The Wall Street Journal, is to repeal the current structure of pretax contributions to retirement accounts and adopt a system where contributions would come only from after-tax contributions, just as Roth IRAs do now. It also has a name, “Rothification.” It could become very popular in the not too distant future.

However, behind this need to plug the gaps in the national budget could be a dismal scenario for workers saving for retirement.

Those U.S. savers who do save money for retirement now contribute to their IRA, SEP, and other tax-deferred accounts with money that is deducted from their taxable income. They only pay taxes on this money when they take Required Minimum Distributions (RMDs) during retirement, or after age 72. The tax deferral provides a powerful incentive to save. The Investment Company Institute reports that defined contribution plans and IRAs were valued at $18.3 trillion as of the third quarter of 2019.

With a federal deficit now at more than $1 trillion and the federal debt at $23 trillion (according to the U.S. Treasury), the money has to come from somewhere. The Treasury also estimates that it will forgo $2.4 trillion in tax revenue from the nation’s tax-deferred retirement savings over the next ten years.

With Social Security having an additional $43 trillion in underfunding, according to the 2019 report of the Social Security and Medicare trustees, government funds are going to have to come from somewhere.

Under “Rothification,” savers would make their retirement fund contributions with after-tax income, and the Treasury would get its money now, rather than waiting for current workers to retire or die.

The challenge is that people don’t save as much as they need to for retirement. Many of them are depending upon Social Security to cover the lion’s share of their retirement income. Removing the tax incentive for retirement saving will discourage retirement saving.

What will that mean for estate planning? Adjusting to the changes from the SECURE Act already has estate planning lawyers reviewing estate plans for the new ten-year withdrawal requirements for IRA beneficiaries. Once the “Rothification” discussions move from talk to legislation, expect large push-back from the financial services industry, which runs these accounts, now worth $18.3 trillion.

Reference: The Wall Street Journal (February 17, 2020) “What ‘Rothifying’ 401(k)s Would Mean for Retirees”

Should You Name a Trust as an IRA Beneficiary?

“For obvious reasons, including control, privacy, asset protection, etc., many clients are interested in putting assets into a trust. For many retirees, their IRA is among their biggest assets. It’s only natural to want to put the IRA into a trust.”

An IRA may not be placed into a trust while the account owner is alive. An IRA also may not be owned by more than one person. The IRA owner can name a trust as a beneficiary of an IRA. Just because you can do this, does not mean it is a good idea, says the article “Naming Your Trust as an IRA Beneficiary” from The Press of Atlantic City. The IRA owner could also take all of the funds and deposit them into a trust, but that would be another bad idea. Why? It is because all of the funds withdrawn would be subject to income tax.

Therefore, why would anyone want to name a trust as the beneficiary for an IRA?

• If you want an heir, like a second spouse, to inherit the income but not the balance of the principal after you have died. This is done so the second spouse cannot name their children as the beneficiary, instead of the original account owner’s children.
• If you are concerned with the ability of heirs to manage your IRA funds wisely, a trust can be the beneficiary and you can set the terms with which the heirs can have access to the funds.
• Minor children cannot be direct beneficiaries of an IRA, and a disabled child may become ineligible for government benefits, if he or she receives an inheritance directly.
• If you want your IRA funds to be inherited by grandchildren instead of children, a trust is the way to go.
• If creditor protection is a concern under the laws of your state, a trust would keep the IRA funds from being tapped by claims of creditors.

Here is why you would NOT want to name a trust as the beneficiary of your IRA:

• There are no tax benefits to having the trust inherit your IRA.
• Trusts have expenses. Trustee fees and tax rates on funds left inside the trust, but not in the IRA, may be substantially higher than personal income tax rates, depending on the beneficiary.
• The trust will have to keep going long after your own death. That means tax returns must be filed, fees paid, and the trustee must maintain the trust.
• Some companies that hold IRAs do not allow trusts to be beneficiaries of IRAs. Before you get into figuring out if this is the right route for you, find out first if your custodian will permit it.

There are many other facts to consider before deciding to name a trust as the beneficiary of an IRA. Speak with your estate planning attorney to see if it is a suitable solution for you and your family.

Reference: The Press of Atlantic City (February 13, 2020) “Naming Your Trust as an IRA Beneficiary”