IRA trusts can have beneficial results, such as creditor protection, but are susceptible to some common pitfalls, which can cause acceleration of required minimum distributions and lessen the tax deferral benefits. Two main situations that can accelerate RMDs are missing the October 31 deadline for sending necessary paperwork to the IRA custodian, and including charitable bequests from an IRA trust that mistakenly results in the charity as the trust beneficiary. Succumbing to these common pitfalls can result in the attorney, CPA, CFP, or other financial planner involved being exposed to discipline and lawsuits.
See Seymour Goldberg, Dealing With Faulty IRA Trusts, Accounting Today, Dec. 17, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
