![]() Trusts, businesses, corporations, and anything else not explicitly human won’t qualify. IRAs must have a natural person as their owner. When it comes to IRAs, trusts are used to direct and control the flow of money following the original owner’s passing. Trusts can also help mitigate estate taxes and even help provide for special needs children who may not be able to care for themselves. Or to protect a spendthrift child from blowing their inheritance. Grantors can use trusts to ensure that their surviving spouse doesn’t disinherit their children from a previous marriage, for example. Trusts are commonly used in estate planning situations since it allows the grantor to exhibit some control over what happens to their money after their passing. Investors must plan carefully when naming a trust as the beneficiary of their IRA.Ī trust has three parties: The grantor who creates the trust, the trustee who manages and administers over the trust, and the beneficiary who gets the use of the trust. Coupling it with a trust, another complicated vehicle, can make it especially intricate. However, the IRA is also an elaborate and tax-sensitive asset for estate planning and wealth transfer purposes. That’s more than all defined benefit (pension) plans in the US combined. investors held more than $13 trillion in IRA accounts. ![]() In fact, the Investment Company Institute (ICI) reports that as of 2021’s third quarter, U.S. The IRA is one of the most significant retirement vehicles in America.
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