Beneficiaries for IRA: In children's names or in the name of the trust I have set up for them?

[Anonymous]

Any finance people on with knowledge on this?
for background: I'm in NYS (where apparently probate is "not a huge deal", according to estate planning attorney)

I have 2 different financial advisors telling me 2 different things:

1 says to make the trust i have set up for my kids as the Beneficiary of my IRA, because of the 10-year distribution rule for Inherited IRAs.
But the advisor at the bank I have the IRA with says to leave it directly to my children, to avoid probate.

TIA!

[Anonymous]

I mean if you set the trust up as the beneficiary in your account it wouldn't go through probate either. I think the only drawback to leaving it to the children is if you have a conduit trust which was a much better set up before the Secure Act and the 10 year rule.

[Anonymous]

Can't believe you're coming here of all places for serious financial advice, especially when you already have two financial advisers.

[Anonymous]

Why? I got conflicting advice. So I need to ask questions. Don't know what questions to ask until I know what questions to ask. Getting an idea of questions to ask is exactly what you should do in situations like this. Coming here and asking provides that. I encourage you to consider it yourself if you're in a similar situation (financial or not)

[Anonymous]

Anonymous wrote:I mean if you set the trust up as the beneficiary in your account it wouldn't go through probate either. I think the only drawback to leaving it to the children is if you have a conduit trust which was a much better set up before the Secure Act and the 10 year rule.

Thanks. And thanks for pointing out that neither goes through probate. Dont understand why he thought it would.

[Anonymous]

How old are the children? If you want to control access beyond the grave (in addition to the tax restrictions), the trust would be better?

[Anonymous]

Anonymous wrote:Why? I got conflicting advice. So I need to ask questions. Don't know what questions to ask until I know what questions to ask. Getting an idea of questions to ask is exactly what you should do in situations like this. Coming here and asking provides that. I encourage you to consider it yourself if you're in a similar situation (financial or not)

Well, let's see . . . you have an "estate planning attorney" saying to leave it to the trust, and you have a clearly wrong "advisor" at the bank saying that that wouldn't avoid probate.

If you're not going to listen to the professional you actually hired and are paying for estate planning and instead crowd source your plannng to a bunch of internet strangers on a website that isn't even meant for New Yorkers, well, ok . . . you do you.

[Anonymous]

Do you have over the $15MM/$30MM which triggers taxes (and what are NY estate tax thresholds and laws)?

It’s true that beneficiaries don’t deal with probate but the trust is to avoid taxes (and also doesn’t go through probate).

[Anonymous]

Probate is a huge deal. Simplify it all before you pass.
How old are the children? Like adult children?
How much money?
If you have a lot, pay the advisor/lawyer to clear it all up. If you don't, why are you even wasting money and time on advisors and trusts. Make the kids beneficiaries. Or even better, start giving money away already now.
We received a traditional IRA and Roth IRA for a minor child sent straight to the other parent to manage. The rest of the money sits somewhere in estate account.
Depends of the state, the age of the children, the bank, the amount and who knows that else. Robinhood did not allow minors as beneficiaries.

[Anonymous]

Anonymous wrote:Do you have over the $15MM/$30MM which triggers taxes (and what are NY estate tax thresholds and laws)?

It’s true that beneficiaries don’t deal with probate but the trust is to avoid taxes (and also doesn’t go through probate).

IRAs get included for the calculation of estate taxes either way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why? I got conflicting advice. So I need to ask questions. Don't know what questions to ask until I know what questions to ask. Getting an idea of questions to ask is exactly what you should do in situations like this. Coming here and asking provides that. I encourage you to consider it yourself if you're in a similar situation (financial or not)

Well, let's see . . . you have an "estate planning attorney" saying to leave it to the trust, and you have a clearly wrong "advisor" at the bank saying that that wouldn't avoid probate.

If you're not going to listen to the professional you actually hired and are paying for estate planning and instead crowd source your plannng to a bunch of internet strangers on a website that isn't even meant for New Yorkers, well, ok . . . you do you.

sorry i seem to have made you angry. next time you can just move on. unless you get something out of it, i guess.

[Anonymous]

Anonymous wrote:Do you have over the $15MM/$30MM which triggers taxes (and what are NY estate tax thresholds and laws)?

It’s true that beneficiaries don’t deal with probate but the trust is to avoid taxes (and also doesn’t go through probate).

no, i do not meet that threshold, at least at this point. so in that case, you're saying leaving directly to kids would require they pay taxes, leaving to trust would not. Right? So in that case it seems clearcut that I'd leave to trust!

Though I was researching and there's something about the trust having to be a see-through trust. But since my disaster clause leaves money to charity, that means it's not a see through trust. (Do you happen to know anything about that?) Thanks for the feedback!

[Anonymous]

Anonymous wrote:Post on Bogleheads instead. That is a much better for actual financial advice.

+1. Particularly BSteiner, that man is amazing!

[Anonymous]

You need to ask your estate lawyer who drew up your documents.

[Anonymous]

Are your children minors or do you feel the need to put restrictions on the money after your pass? If yes, go for the trust. If not, then name your children. But keep the 10 year rule in mind if you are in retirement and are drawing down your assets.