Retirement Trusts

Stamford, Connecticut, Retirement Trust Lawyers

An IRA can be a powerful tool for retirement savings. When contemplating your estate plan, however, how can you protect the proceeds of your IRA funds from failed marriages, failed businesses or unpaid creditors? At the Law Offices of Richard A. Sarner, our attorneys can help you create a retirement trust plan that works for you. We can show you how to spread the distribution payments from your trust out over the life expectancy of the youngest beneficiary, thereby allowing your beneficiaries to defer income tax on the proceeds.

For more information about retirement trusts and how we can help you, contact the Law Offices of Richard A. Sarner today to schedule an appointment.

Trusts that Can Compliment Your Retirement Plan: Conduit Trusts and Accumulation Trusts

An IRA can be left to one of two types of trust: a conduit trust or an accumulation trust. Of the two, a conduit trust is easier to draft and can be used whether the beneficiaries are charities or individuals. However, conduit trusts don't offer the same level of protection from creditors as an accumulation trust.

In an accumulation trust, the trustee keeps the funds in the trust until he or she determines that it is appropriate to make a distribution. Furthermore, a third-party trust protector is given the power to restrict who can receive the property. On the other hand, minimum distributions must be taken based on the life expectance of the oldest beneficiary, and you must take care to limit who the beneficiaries are.

Designated Beneficiaries

A crucial step in the process of creating a retirement trust is ensuring that the trust qualifies as a designated beneficiary under tax laws. Fortunately, a conduit trust automatically qualifies as a designated beneficiary under a safe harbor provision in the IRS regulations.

When creating an accumulation trust, however, you have to be more careful. To qualifiy as a designated beneficiary, an accumulation trust must:

• Be valid under state law
• Be irrevocable upon death
• Have identifiable beneficiaries
• Be provided to the plan administrator by October 31 following the year of death

One way to make an accumulation trust more likely to qualify as a designated beneficiary is to leave the IRA to a stand-alone accumulation trust, which becomes irrevocable at the owner's death. Given the complex requirements that must be met to ensure that a trust qualifies as a beneficiary of an IRA, it is easier to use a stand-alone trust than to leave the IRA to an existing revocable trust, since you reduce the likelihood of errors that can cause a trust not to qualify.

Contact Retirement Trust Attorneys Today

Don't leave the final disposition of your retirement benefits to chance. Make sure that documents are drafted to ensure that each of your beneficiaries obtains his or her proper share of your IRA. To schedule an appointment to discuss your retirement trust, contact trust attorneys at the Law Offices of Richard A. Sarner today.

The Law Offices of Richard A. Sarner • www.SarnerLaw.com

The Law Offices of Richard A. Sarner, LLC, proudly serves clients in Fairfield and Westchester counties - including the Connecticut communities of Stamford, Bridgeport, Fairfield, Norwalk, Danbury, New Haven, Westport, Wilton, Ridgefield, Greenwich, New Canaan and Darien, and the New York City boroughs of Manhattan, Brooklyn, Queens, and the Bronx and the Westchester County communities of White Plains, Bedford, Pound Ridge, Scarsdale and Nassau County and Suffolk County on Long Island.

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