TITLE

Should Planners Recommend Trusts as IRA Beneficiaries?

AUTHOR(S)
Brown, Cal; Campbell, Thomas
PUB. DATE
October 2003
SOURCE
Journal of Financial Planning;Oct2003, Vol. 16 Issue 10, p52
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article stressed that financial planners who recommend naming a trust as beneficiary of a qualified retirement plan or IRA are telling clients to cross a minefield. Trusts have many uses. They can manage property for people who are young or disabled. A trust is often valuable to use in an estate plan. The worst tax situation that could confront a client is if the entire IRA has to be distributed within five years of the owner's death. Five basic rules must be followed if beneficiaries of a trust are to be considered designated beneficiaries of an IRA and thus eligible for stretching the distributions. Taxable income is a familiar concept to most financial planners, as it is used to determine which receipts are reported as income for income tax purposes and who is to be taxed on that income. Almost all states have adopted one of the versions of the Uniform Principal and Income Act (UPIA). Under UPIA, the trustee has $1,000 of income and $9,000 of principal. This illustrates the basic dilemma of the credit shelter trust as an IRA beneficiary. The IRS position is that when a trust is the IRA beneficiary, both the trust itself and the IRA must qualify. The bottom line is that clients can not have it all.
ACCESSION #
11032789

 

Related Articles

  • Who Are You? Levin, Ross // Journal of Financial Planning;Nov2002, Vol. 15 Issue 11, p32 

    This article argues the need for financial planners to take a holistic approach in planning. We are trying to create a new derivation out of something that many of us have been doing ever since we started in the business. Life planning is really holistic planning. It is not new. Remember,...

  • Doing Good and Doing Well. Grant-Smith, Linda // Financial Planning;Oct2015, Vol. 45 Issue 10, pA13 

    The article explains the attributes that help women excel as Certified Financial Planners (CFP). It notes the essential qualities that CFP professionals must have to guide clients including integrity, compassion, and competency. It cites that the empathy and creativity innate in most women make...

  • The Rubber Meets the Road. Connelly, Thomas J. // Journal of Financial Planning;Dec1998, Vol. 11 Issue 6, p28 

    This article focuses on the issue concerning the failure of some investment managers to effectively manage the assets and money of their clients. By virtue of being human beings, all people will make mistakes eventually and one must be prepared to deal with them. As investment managers and...

  • Don't forget how far we've come. Helmich, Steve // Money Management;11/18/2004, Vol. 18 Issue 43, p14 

    The article reports that financial planners have taken a lot of criticism recently from some who say that they are not moving quickly enough to embrace change. While there is more to be done, they have come far in a short time. Their profession is more geared to community needs and expectations...

  • Records of advice: the relief we wanted? Bennetto, Lucille // Money Management;3/9/2006, Vol. 20 Issue 8, p20 

    The article focuses on the practical implications of using a record of advice and the need for supporting evidence in financial planning in Australia. The purposes of the refinement to the Financial Services Reform Act provisions was to ensure that Statements of Advice are not ignored by...

  • CE Quiz.  // Financial Planning;Jun2005, Vol. 35 Issue 6, p176 

    Presents a test related to investing that are of importance to financial planners in the U.S.

  • Comeback Kid. Polyak, Ilana // Financial Planning;Jul2007, Vol. 37 Issue 7, p47 

    The article features Jacob Internet fund manager Ryan Jacob. Jacob became popular as a fund manager when he managed the Kinetics Internet fund from 1998 to 1999. He states that he has learned valuable lessons from watching his fund plummet. He argues that the cheaper one buys a stock, the less...

  • Nick Cann: Independent thinking needed on independence.  // Money Marketing (Online Edition);3/19/2012, p29 

    The article presents the author's views on the need for independent and restricted financial advice. He comments that there is a strong emotional attachment to the philosophy of independence. He remarks whether the client is seeking independence or an individual and business they can trust to...

  • Behavioural finance: The biggest mistakes investors continue to make.  // Money Marketing (Online Edition);9/17/2012, p19 

    The article discusses the significance for financial advisers in Great Britain to understand behavior finance patterns. The author suggests that understanding the behaviours finance patterns can support the advice of financial advisers to their clients. He also looks into the various anomalies...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics