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


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