Your IRA (Individual Retirement Account) is limited in ways that a personal Revocable Living Trust wouldn’t be. A trust allows you to maintain a great deal of control over your assets and provide specific contingencies for the distributions, while an IRA is more limited in what personal solutions it offers.
One option is to name your trust as your IRA beneficiary. This will transfer the remainder of your IRA funds to your revocable living trust at death, subjecting these funds to whatever terms you created in your trust.
When you marry or enter into a longterm relationship, it may make sense to begin to combine assets. Many couples consider creating a joint estate plan such as a joint trust to manage their financial affairs after death. Consider a few factors before making your decision.
If something were to happen to you and your partner while your children were still minors, how would you divide your assets among them?
If you answered “equally,” you are like many parents who presume that giving each child an equal share of your estate is the fairest solution. But in some cases, uneven distributions may be a better — and surprisingly fairer — alternative.
The way you currently provide for your children is based on need rather than on equity. If Susie needs to see a doctor, it does not matter that she has gone to the doctor twice more than Bobbie this year; you take her to the doctor’s office anyway. Your financial decisions are based on needs as they arise, not a meticulous accounting to ensure that you spend exactly the same amount on each child. Your estate plan should match this.
Though you may be familiar with the concept of a will, you may not be aware that there are actually multiple different ways to give away your property when you die. One such mechanism is called a revocable living trust. Though the term may sound complex, the function of a revocable living trust is simple if you break down the name.