The term “IRA trust” refers to several different types of trusts designed specifically for IRAs containing a significant amount of money. Generally an IRA trust is set up to be the beneficiary of the IRA. The IRA may be a “stand alone” trust separate from other trusts, a “subtrust” incorporated into another trust, for example, a revocable living trust, or may take other forms. The generally accepted rule of thumb is that a person with an IRA containing more than $200,000 should consider setting up some type of IRA trust.

IRA trusts may be used when the owner of the IRA wants to control how or when the beneficiaries of the IRA assets use the assets. IRAs are already “non-probate” assets with designated beneficiaries. Without an IRA trust, the beneficiaries can often use the IRA assets how and when they want, with the result that they may incur significant negative tax consequences. Making an IRA trust the beneficiary of the IRA, instead of directly designating personal beneficiaries, gives the owner of the IRA control over how the beneficiaries of the IRA trust may use the IRA assets. IRA trusts can be used to “stretch” out the IRA assets over a longer time period to both avoid negative tax consequences and prolong the benefits.

While we work in corporation and asset protection law, we can refer you to a Reno living trust attorney for more information. Call us at (800) 700-1430.