IRA’s and your Florida Living Trust

Jacksonville IRA distributions lawyerOne common mistake that people make when they have a spouse or children is to transfer their retirement accounts into their Florida Living Trust.

Generally, retirement accounts are not subject to probate because you can name beneficiaries. If you name individual beneficiaries, each beneficiary is given the most flexibility in the way they take and report the proceeds from the IRA.

If you name a Florida Living Trust, the beneficiaries might have to take all of the distributions in the year after death. This can happen when one of the beneficiaries is a charity or not an individual.

The other main problem is when there is a great difference in age between the oldest and youngest beneficiary. Often this happens when the spouse is one of the beneficiaries and there are children or grandchildren that are also named beneficiaries. When this happens it is possible to make all of the distributions the same as with the oldest beneficiary.

These problems can be solved or avoided if the retirement accounts are properly setup, separated, or if the problem beneficiaries are dealt with timely.

Generally its best to either name beneficiaries with retirement accounts individually, separate the retirement accounts while you are still alive, or name a separate revocable trust for these benefits that is different that the main revocable trust.

For more information on how to deal with retirement accounts in probate you should talk with a Florida Probate Lawyer who is familiar with Retirement benefits. It is even better to plan things upfront by using a Florida Estate Planning Lawyer.

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