Reply to Retirement account beneficiary and a revocable trust

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]My understanding is that retirement accounts with beneficiaries are separate from the trust.  Beneficiaries on bank accounts trump wills/trusts.  Are there secondary beneficiaries listed in the retirement accounts?[/quote]

This is also my understanding that beneficiaries trump wills/trusts. I've read you can (in some states) make a trust the beneficiary. However, my parent has dementia so I don't know if we can change the beneficiaries this way.

I had to get a letter stating she can't make her own decisions in order to open a trust bank account for the proceeds from the sale of her house. With that on record, I'm not sure if she could change beneficiaries.

I could sell the investments. At the very least, I could move the cash part into the trust...

[/quote]

I think that's right—my comment above about per stripes applied to a larger trust with assets like a brokerage account and real estate. I think with retirement accounts, if there are two beneficiaries and one beneficiary dies, then it all goes to the living beneficiary, or the successor beneficiary if it is set up that way. Either way, it passes outside of probate.  Talk to an accountant, but I believe there are negative tax consequences to making a trust a beneficiary of a retirement account (require quicker distributions). [/quote]

I am working on my parent's estate and the IRA passed directly to beneficiaries outside of the trust/estate. It was easy to distribute, but there are the 10-yr rules for withdrawal and its taxable and has to be maintained as separate accounts by the heirs so it can be withdrawn correctly over the term. If one heir died, I think the remaining primary beneficiary would inherit all. [/quote]

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