If you’re considering organizing your assets in a way that will let you maximize your retirement savings, you’ve probably considered setting some aside in an individual retirement trust. These trusts maintain the same tax advantages that come from using an individual retirement account (IRA) while providing more long-term control of the trust assets. Retirement trusts are truly the best of both trusts and IRAs.
An IRA is a savings account that allows you to invest funds for your retirement which you can access when you reach 70.5 years of age. You can either make your contributions into the account tax free or take your distributions from the account tax free.
A trust is a commonly used estate planning tool that allows you to set aside investments and assets for your beneficiaries to receive after your death. The trust is controlled by a trustee who is responsible for managing the trust and making investments or distributions.
A retirement trust combines the tax advantages of the IRA account with the control elements of the trust. You’re able to save for retirement in a way that maximizes tax advantages and ensure your funds are distributed in the way you prefer, selecting multiple beneficiaries to inherit different amounts in a way that isn’t changeable after you pass. You can also set rules on distributions or leave them up to the trustee’s discretion. In addition, the trust set up allows you to bypass the IRS’s requirement that you name a trust as an IRA beneficiary and protect your assets from potential creditors.
Another advantage to clients is that individual retirement trusts can be set up to include provisions that ensure your accounts are properly maintained in the event of your illness or long-term disability. A trustee of your choosing will manage your retirement investments, coordinate details of trust management, and handle any additional details without the need to appoint a separate guardian.
Your individual situation is unique, so it’s important to seek tax and financial planning advice as you consider how to structure your assets for retirement and estate planning purposes. If a large portion of your wealth is held in a retirement account, you must at least consider a Retirement Trust. There are many types of trusts, accounts, and investment tools available to meet the concerns and goals of different individuals. If you’re tax-sensitive and want to retain more control of your assets, an individual retirement trust may be a good solution for you.
As part of your estate plan, an individual retirement trust can provide unique benefits and control as well as drastically simplify the administration of your estate. Contact Virtus Law Firm today by calling 612.888.1000 or emailing info@virtuslaw.com. We have significant experience helping individuals review their assets and goals and set up comprehensive plans to meet their needs.