David W. Harper
Retired Attorney
Tax Ideas

 

Article 28
Naming a Testamentary Trust As Beneficiary

There are times when naming a testamentary trust as beneficiary of an IRA or retirement plan (hereinafter called "IRA") is the best strategy. You should consider naming a testamentary trust as beneficiary in a situation where there is a second marriage, and the owner wants to control the IRA during the spouse's lifetime so that whatever is left will be distributed to his or her children. Naming the spouse individually will result in the ability of the spouse being allowed to "roll over" the account into his or her name and list different beneficiaries to receive the IRA on his or her death. The rules for naming a testamentary trust as beneficiary of an IRA are very complex and professional advice should be sought prior to doing so.

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