Article on Dealing With Faulty IRA Trusts

Seymour Goldberg (Goldberg & Goldberg, P.C.) recently published an insightful article entitled, Dealing With Faulty IRA Trusts, Ed Slott’s IRA Advisor (December 2014).  The article cautions practitioners against giving uninformed advice in the realm of retirement planning and IRA trusts, and iterates the importance of competent practice.  Provided below is the article’s introduction:

Naming a trust as an IRA beneficiary may offer many benefits.  If drafted properly, a trust can protect the account from creditors and reduce the risk that money will be mishandled.  On the other hand, naming a trust as IRA beneficiary makes it more challenging to stretch out required minimum distributions (RMDs).  Maximum tax deferral is possible, but only if the trust is crafted carefully and if the trustee follows proper procedures.

In reality, many IRA trusts are flawed, for purposes of extended tax deferral, and trustees often fail to meet a crucial deadline.  Advisors may face difficult after-the-fact decisions with noncompliant IRA trusts, and failure to take appropriate action could have unfortunate consequences.

Special thanks to Seymour Goldberg (Goldberg & Goldberg, P.C.) for bringing this article to my attention.