Article: Protecting the Personal Rep

In Protecting the Personal Rep, Seymour Goldberg, senior partner at Goldberg & Goldberg, explains steps that can be taken to protect the personal representative of IRA trusts.

Goldberg explains that, “[s]uch precautions may be useful if there is likely to be a large IRA and a substantial estate tax liability, but insufficient probate assets for paying estate tax.” 

If this is the case, the personal representative “could be responsible for paying federal/state estate tax to the extent of probate assets.” Goldberg went on to say, “If the personal representative has knowledge of unpaid estate tax but distributes money to creditors instead of the IRS, rendering the estate unable to pay the estate tax, the IRS can hold the personal representative personally liable for unpaid tax. . .”

According to Goldberg, one possible solution would be to name a short-term trust (terminating 5 years after the IRA owner dies) as IRA beneficiary. 

For more information and tips, See Seymour Goldberg, Protecting the Personal Rep, Ed Slott’s IRA Advisor (January 2022).