October 26, 2018
Beneficiary Designations on IRA Accounts from Ed Slott’s Elite IRA Mastermind Group | Berry’s Bites
Chris Berry is in sunny San Diego at Ed Slott’s Elite IRA Advisor group and he wants to share the latest as it relates on who to name as a beneficiary of your 401k or IRA. Many times it’s spouse first, then trust as a contingent beneficiary. If you haven’t reviewed your beneficiary designations. Now is the time.
Too often, advisors and attorneys are hesitant to name the trust as the beneficiary of an IRA, because they are worried about the five year “non-designated beneficiary,” but if the trust is set up correctly, the trust can still qualify as a designated beneficiary and you can still create a stretch-IRA for your loved ones.
Beneficiary Designations on IRA Accounts from Ed Slott’s Elite IRA Advisor Group | Transcript:
Chris Berry here. Today I’m actually in sunny San Diego at a Ed Slott conference. Ed Slott, he’s been called America’s IRA Expert by the Wall Street Journal. And so, today and tomorrow were spending about eight hours a day just talking about some of the newest rulings as it relates to retirement accounts.
This morning we spent a lot of time talking about beneficiary designations and the importance of making sure that we review the beneficiary designations on IRA’s because if we don’t handle them properly, they can end up going into probates, we can miss out on some of the spousal rollovers that are available, and we can miss out the stretch IRA opportunity for the beneficiaries.
One of the biggest things that we see, actually, in our practice is that trusts aren’t named as the beneficiary of the IRA because too often people are worried about triggering the five year rule for the distribution where all the distributions have to be, or all the tax has to be paid within five years. But if you set up the trust properly, then that’s not an issue. So one of the things that we always do is we look to name the trust as beneficiary to build in that stretch option but then also build in the asset protection that a trust can offer when we include what we call legacy inheritance trust language so that we can stretch it out for the lifetime of the beneficiaries and it can be protected from the divorces, lawsuits, creditors, and asset protection.
So, we spent this morning and so it’s about lunch time. Just taking a break and then we’re going to spend another about four hours just getting into a deep dive of retirements distributions. And it’s a beautiful day here in sunny San Diego.
And so with that, that’s it’s for Berry’s Bites. Make it a great day.