IRAs and a Living Trust – What Every Grantor Should Know

Web Admin - Thursday, July 13, 2017

Mount Prospect wills and trusts lawyersAfter years, perhaps even decades of pouring money into your individual retirement account (IRA), it only makes sense to ensure it goes to the appropriate party if you do not live long enough to receive all the payments. Unfortunately, transferring an IRA to a living trust can be far more complex than most people realize. The following information can help you better understand how to avoid such consequences. You shall also learn where to find assistance with the process.

The Complicated Nature of IRA Accounts

Created under the Employment Retirement Income Security Act (ERISA) in 1974, IRAs were originally meant to provide employers with a way to offer affordable retirement benefits to their employees (at that time, most did not have the funds to cover a traditional pension plan). Now they are one of the most common types of retirement plans, and they can even be purchased by individuals with qualifying income and credentials.

Unfortunately, there are many rules, exclusions, limitations, and legalities involved with an IRA account – especially when it comes to the transfer or disbursement of the account. For example, IRAs can only be “owned” by the individual that started it. It cannot be transferred to a trust nor can it be owned by a business or other entity. Still, there are ways to transfer an IRA upon death. It just requires some thoughtful planning.

Transferring an IRA to a Living Trust

While one could simply name a beneficiary for their IRA account, some plan owners prefer the increased accountability of a trust. For example, if the grantor has a special needs child with their ex-wife, they may want to ensure that the funds are used to benefit the child directly. Just keep in mind that disbursement to a trust before the age of 59.5 is considered an early disbursement, which may result in an early payout penalty. As such, it is recommended that you speak with an experienced wills and trusts lawyer before naming a trust or changing the beneficiary on your IRA account. An attorney can also help ensure the right verbiage is used in your estate plan (i.e. “pass through,” “designated beneficiary,” etc.) to reduce the risk of any transfer issues.

Contact Our Mount Prospect Wills and Trusts Lawyers

Known for our creative solutions and personalized touch, the experienced Mount Prospect wills and trusts lawyers at Drost, Gilbert, Andrew & Apicella, LLC can assist you with your estate planning needs. Get started by scheduling a consultation. Call our offices at 847-934-6000 today.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

Sources: https://www.forbes.com/sites/deborahljacobs/2014/09/04/iras-and-trusts-what-you-need-to-know/#4fe760a2172b

Recent Posts


problem employees Crystal Lake will lawyer Barrington drug crime attorney forming a corporation in Illinois Des Plaines collections attorney Schaumburg elder law lawyer employee misclassification Fair Labor Standards Act Palatine elder law attorney Chicago will attorney, social media platforms, Illinois estate planning lawyer, Palatine punch death digital evidence Palatine trusts lawyer Schaumburg criminal law attorney rumble strips Schaumburg employment law attorneys Inverness personal injury attorney Schaumburg medical malpractice lawyer Deer Park DUI lawyer Liquor Control Act personal injury claims rent to own real estate contracts Schaumburg personal injury lawyer Rolling Meadows estate planning attorney Rolling Meadows real estate attorney car collision right to work blended families preventable medical errors Illinois medical malpractice lawyers motorcycle accident lawyer installment contracts overtime violations Arlington Heights insurance attorney Chicago estate planning blood alcohol content Illinois attorney attorney fees jet ski cell phone tower data Crystal Lake bike accident lawyer driving pedestrian injuries, pedestrian fatality fiduciary rule delay breathalyzer test manufacturing texting and driving Illinois mortgages social media after death landlord Illinois rollover accident lawyers low-ball insurance settlement Buffalo Grove traffic attorney probate claims probate claims process DNR Illinois employment law attorneys insurance claim denials Illinois defective products attorney Arlington Heights car crash attorneys civil litigation attorney traumatic brain injury Illinois civil litigation lawyer DGAA personal injury lawyer Jay Andrew Illinois registered agent wills underinsured motorist foreclosure spinal cord injury car accident lawyers Chicago attorney Palatine traffic lawyer employees Buffalo Grove law firm IRA trust transfer Illinois Smoke Detector Act workers compensation benefits capital gains tax Long Grove estate planning pregnant women Illinois real estate swimming pools Palatine employment attorney Self-Directed IRA Accounts natural gas Buffalo Grove medical malpractice lawyers Illinois insurance disputes Inverness real estate lawyer Arlington Heights traffic attorney sexual images Illinois DUI attorney wage theft Deer Park medical malpractice attorney Illinois medical malpractice claim Buffalo Grove criminal defense lawyer GM ignition switches Arlington Heights lawyer Illinois personal injury attorney employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, agent Inverness corporate attorney underage DUI Illinois Probate Act of 1975 changes to mortgage law jet ski accidents bike accident Illinois traffic laws rollover car crashes workplace sexual harassment Chicago lawyer first degree murder dealing with problem employees Whistleblower Claims Long Grove real estate attorney Inverness traffic law firm civil rights violation personal injury law firm insurance denials life insurance policy Home Remodeling Repair Act Palatine business attorney Fourth of July work unions corporate law Rolling Meadows tax attorney Illinois insurance attorney living trust benefits Des Plaines drug crimes lawyer traffic offenses Rolling Meadows criminal attorney senior citizens Schaumburg probate attorney llinois Real Estate Lawyers Association Mt Prospect Attorney workers comp wrongful death preventing accidents Palatine insurance lawyer Arlington Heights wills and trusts attorney Inverness insurance attorney Mount Prospect elder law attorney real estate contract fatal car accidents Crystal Lake employment lawyer holiday statistics slip and fall appealing an insurance claim medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers ken apicella Illinois criminal defense attorney Des Plaines civil attorney PTSD real estate Deer Park personal injury lawyer Illinois bicycle safety unauthorized overtime Rolling Meadows car accident lawyers Buffalo Grove personal injury lawyer Mount Prospect wills and trusts lawyers Illinois workplace discrimination attorney speeding Crystal lake insurance dispute attorney medical malpractice Buffalo Grove traffic lawyers Arlington Heights Attorney murder charges estate attorney Arlington Heights criminal lawyer landlord tenant law employee rights denial of life insurance Arlington Heights medical malpractice lawyer Arlington Heights employment attorney Crystal Lake car accident attorney ObamaCare Deer Park traffic accident attorney Illinois corporate lawyer Arlington Heights trucking lawyer life insurance elder abuse Illinois employment law attorney power of attorney for healthcare comp time Schaumburg real estate lawyer BUI ACA DMV living wills CAM Crystal Lake pet attorney reckless homicide contracts institutional trustee owner responsibility wills and trusts insurance agent negligence Rolling Meadows DUI lawyer Illinois small business pedestrian-automobile accident TBI Illinois insurance dispute lawyers investment property Palatine construction attorney Rolling Meadows Attorney Long Grove wills and trusts attorneys medication errors college kids Thanksgiving IRA benefits caretaker rights financial advisors denied insurance claims Rolling Meadows Traffic Lawyer defective products lawyer South Barrington real estate attorney drunk driving Palatine workers compensation lawyer Palatine probate lawyer civil litigation trauma after an accident Illinois employee rights attorney. Barrington estate planning lawyer Illinois boating accident lawyer Barrington litigation attorney POA Illinois LLC creation irrevocable trust license revocation Federal Food Drug and Cosmetic Act Colin Gilbert Des Plaines pet law attorney Landlord Tenant Ordinance Rolling Meadows corporate lawyer Arlington Heights pedestrian accidents food poisoning employee discrimination Inverness injury lawyer wrongful termination Crystal Lake tax lawyer back injuries Arlington Heights wills and trusts attorneys Illinois personal injury lawyers commercial real estate employment law gift taxes privacy Illinois business lawyer comparative negligence Joliet general practice lawyers car accidents Illinois traffic attorney personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys Deer Park traffic lawyer involuntary manslaughter head on collisions Employment Discrimination Law deed transfer tax attorney rest breaks Crystal Lake medical malpractice law firm unpaid overtime Barrington Illinois estate planning lawyer spinal cord injuries Crystal Lake personal injury lawyer Affordable Care Act Des Plaines loopholes filing a medical malpractice claim life insurance lawyer IRELA probate real estate attorney Rolling Meadows marijuana attorney drug crime Illinois pet lawyer Chicago corporate attorney denied insurance claim Illinois drunk driving statistics dynasty trusts Rolling Meadows criminal lawyer wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace estate plan Illinois red light cameras Palatine corporate law attorneys Schaumburg car accident attorney Illinois traffic attorneys Illinois job attorney insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys Buffalo Grove employment lawyer consent to a search license Illinois traffic accident lawyer pet law Illinois medical malpractice case traffic accidents Des Plaines drug lawyer slip and fall accidents icy parking lots construction accidents Crystal Lake traffic lawyer Inverness accident lawyer fault based insurance Barrington employment law attorney disability benefits Des Plaines motorcycle accident attorney Illinois pedestrian accident attorney Palatine real estate lawyer products liability digital media accounts, estate planning, Arlington Heights estate planning attorney, power of attorney expungement criminal defense DUI penalities Inverness real estate attorney Rolling Meadows personal injury lawyer DUI attorney Des Plaines claims law firm car crash injuries Retaliatory Discharge Arlington Heights car accident lawyer Schaumburg criminal attorney Legal Info Arlington Heights real estate lawyer construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Chicago employment lawyer LLCs Buffalo Grove injury lawyer Inverness civil lawyer business litigation product liability Palatine corporate attorney medical marijuana estate planning lawyer Barrington personal injury lawyer deadly crashes Illinois collections attorney suspended license Crystal Lake business law attorneys drugs Illinois speeding lawyer Rolling Meadows Illinois insurance claim dispute lawyers Palatine traffic accidents commercial leases hit and run accident Rolling Meadows insurance dispute lawyers Barrington criminal defense lawyer living trust vs will trucking accident lawyers subcontractor startup company employment law, Illinois employment laws Schaumburg traffic lawyer Crystal Lake civil litigation lawyer Illinois personal injury loss of consortium pain and suffering vacation home fines Illinois employment law living trust distracted driving accidents job lawyers estate planning attorney Chicago car accident lawyer mass shooting employment lawyer real estate lawyer overtime pay federal regulations for LLCs Rolling Meadows personal injury lawyers Policy Cancellation estate planning Illinois wills and trusts Rolling Meadows litigation lawyer taxes Palatine law firm Schaumburg wrongful death attorney Illinois motorcycle accident lawyer bicycle dooring accidents commercial leasing cell phone distracted driving accident victims special needs trust insurance negligence Illinois wrongful termination lawyer Barrington injury attorney probate fees healthcare Des Plaines real estate lawyer Illinois living will sexual harassment breach of contract BAC Schaumburg drug defense lawyer fiduciary rule Illinois insurance claim attorney Rolling Meadows traffic attorney estate planning for college students defective products Arlington Heights estate planning attorney minimum wage Illinois workers compensation attorney IRS insurance claim delay Palatine civil attorney murder defense Barrington civil litigation attorney rollover accidents Illinois construction accident attorney DUI Chicago biking tips digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers Illinois wills and trusts attorneys dog bites Illinois Workers’ Compensation Commission Buffalo Grove car accident lawyer Food and Drug Administration's Food Safety Modernization Act murder Deer Park real estate law firm Illinois injury lawyer Schaumburg Attorney eluding a police officer Illinois Human Rights Act drug possession Long Grove estate planning attorney Schaumburg injury lawyer Illinois insurance claim dispute lawyer underfunded trust Illinois elder law attorney Long Grove estate planning attorneys Palatine criminal defense lawyer surgical mistakes Crystal Lake personal injury attorney independent contractor Arlington Heights accident attorney Schaumburg corporate attorney Des Plaines personal injury lawyer Rolling Meadows insurance lawyer Buffalo Grove personal injury attorney Illinois law Des Plaines criminal attorney personal injury attorney insurance disputes new real estate form anesthesia errors health insurance dispute sole proprietorship Arlington Heights wills and trusts lawyer Mount Prospect real estate lawyer Schaumburg estate attorney Illinois home inspection insurance claims homestead rights Buffalo Grove probate lawyer Des Plaines Traffic Lawyer Illinois trucking safety Riverwoods estate planning lawyer workers compensation Crystal Lake law firm Illinois employment attorneys employment contract insurance attorney mortgage BAIID liability claims Palatine Attorney residential real estate car crashes construction contracts Crystal Lake medical malpractice lawyer guardianship attorney Colin H. Gilbert Palatine employment law lawyer elder law Rolling Meadows medical malpractice lawyers Rolling Meadows traffic law firm liability insurance claim denial Crystal Lake employment attorney Des Plaines DUI attorney Des Plaines accident attorney Illinois estate planning attorney Barrington employment attorney Illinois employment lawyer pedestrian accidents Illinois traffic ticket lawyer Illinois tax attorney Arlington Heights personal injury attorney no contest clauses automated cars Illinois estate planning law firm Crystal Lake car accident lawyer pet bites Illinois personal injury lawyer insurance claim dispute field sobriety test Family Medical Leave Act Crystal Lake traffic attorney Illinois estate planning Rolling Meadows insurance attorney hands free device Illinois Wage Payment and Collection Act Palatine estate planning lawyer Palatine personal injury lawyer Chicago traffic lawyer Deer Park workers compensation lawyer uninsured motorist real estate closing Des Plaines insurance attorney estate tax Barrington business law firm Crystal Lake pedestrian accident lawyer Crystal Lake medical malpractice attorneys compensatory time boating accidents Illinois insurance claims lawyers FMLA creditors nursing home negligence estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers unpaid assessment Detainer Actions estate planning trusts car crash Deer Park employment law attorney criminal law Chicago estate planning lawyer pay when paid contract Schaumburg construction accident lawyer Schaumburg personal injury lawyers Kenilworth estate planning attorney Barrington estate planning attorney cell phone accidents Rolling Meadows drug defense attorney small business medical malpractice compensation real estate attorneys insurance claim motorcycle accident Rolling Meadows employment attorney Crystal Lake injury attorney Deer Park criminal attorney insurance dispute attorney criminal record traumatic brain injuries Barrington real estate lawyer Palatine injury attorney liens caregiver Chicago insurance law firm accidental death benefits bicycle accidents personal injury accidents pedestrian accident meal breaks Rolling Meadows employment law attorneys vacation home insurance adjusters Schaumburg insurance lawyers Super Mario probate process Exclusions revenge porn license suspension paid sick leave Illinois workplace lawyer real estate leasing Barrington workers compensation attorney Crystal Lake employment law attorney Inverness elder law lawyer Barrington employment law firm pizza emoji Des Plaines injury law firm Crystal Lake accident attorney digital assets license reinstatement Schaumburg civil litigation attorney car accident Illinois workers compensation lawyer Illinois will lawyer Illinois Transfer on Death Instrument Des Plaines tax law firm premises liability bad faith insurance claims Schaumburg personal injury attorney Deer Park accident attorney Barrington medical malpractice lawyers traffic violations defense drug crimes insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys golf accidents in terrorem provision car accident lawyer home inspection lawyer Rolling Meadows employment law attorney digital information clemency texting while driving Crystal Lake insurance lawyer Barrington boating accident attorney Transfer on Death Instrument estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, foreclosed rental property natural gas explosion Schaumburg estate planning lawyer Des Plaines personal injury attorney Arlington Heights Traffic Lawyer Palatine civil litigation lawyer modern family estate planning Illinois Sales Representative Act traffic violations Des Plaines personal injury lawyers trust payments Rolling Meadows probate lawyer condo traffic deaths Kenilworth estate planning lawyer Des Plaines medical malpractice attorney Forcible Entry boating DUI criminal Inverness probate lawyer Illinois employment laws Illinois trusts attorney probate lawyer traffic tickets DUI defense marijuana crimes attorney Illinois real estate lawyer life insurance claims real estate zoning personal injury insurance dispute Arlington Heights employment law attorneys Inverness estate planning lawyer brain injury boating under the influence Rolling Meadows business lawyer internet whistleblower protections Schaumburg estate planning attorney healthcare claims trustee School Visitation Rights Act Illinois business law atorneys employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys marijuana insurance agents privacy laws personal injury claim Illinois car accident attorney Schaumburg employment attorney insurance denial appeals Long Grove real estate lawyer insurance claim dispute attorney federal crimes child safety Illinois jet ski accident lawyer Crystal Lake criminal defense attorney Illinois employment law firm traffic laws income distribution deducation Buffalo Grove insurance claim dispute lawyers trusts medical research Do Not Resuscitate Home Sale Contingencies Arlington Heights tax lawyer Illinois probate lawyer Illinois lawyer Schaumburg Des Plaines real estate attorney Rolling Meadows personal injury attorney traffic crimes Arlington Heights wills and trusts lawyers South Barrington real estate lawyer severance agreements unfunded trust Arlington Heights personal injury lawyer Illinois medical malpractice attorney Rolling Meadows boating crash lawyer medical malpractice claims Barrington criminal lawyer Deer Park motorcycle accident lawyer Buffalo Grove real estate attorney controlled substance Chicago trucking accident attorney Barrington attorney trucking accidents Rolling Meadows accident lawyer Rolling Meadows insurance dispute lawyers, insurance dispute Chicago insurance claim attorneys Palatine employment lawyer Inverness DUI lawyer Barrington personal injury attorney Illinois driving without license drug crimes lawyer truck collisions operating agreements Barrington Traffic Lawyer Attorney Ken Apicella FSLA Crystal Lake estate planning lawyer Palatine drug lawyer Arlington Heights TBI attorney employment attorney Arlington Heights injury attorney trench injuries hiring employees Illinois insurance lawyer condo association advance healthcare directive dram shop law Chicago employment attorney Kenilworth estate planning attorneys crossover accidents Chicago will attorney Buffalo Grove corporate attorney Class A misdemeanor auto accidents