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 Lap. Miller, Bill // Research;Jan2010, Vol. 33 Issue 1, p72 

    The article discusses how financial advisors in the U.S. finish the lap 2010 with eyes open to opportunity and mindful of road hazards. It recounts several situations reflecting on financial planning which include a car racing and the arrest of a father outside an elementary school. It also...

  • The Two Year Plan for Advisor Success. GOOD, BILL // Research;Dec2014, Vol. 37 Issue 12, p51 

    The article discusses the way to increase the amount of asset under management (AUM) within two years for attaining advisor success. Topics covered include a sample case of how an imaginary financial advisor called Justin Case can achieve financial advisor success by making achievable plans,...

  • The Hot Job of Financial Planning&hellip.  // Journal of Financial Planning;Feb1998, Vol. 11 Issue 1, p16 

    Comments on the article featured in "U.S. News & World Report" about financial planning. Popularity of the career in financial planning; Demand for financial planners in the banking, brokerage and mutual fund fields; Failure of the magazine to mention designations or licenses.

  • 'Soft Dollars' and Other Brokerage Arrangements. Lins, Gerald T. // Journal of Financial Planning;Feb1998, Vol. 11 Issue 1, p89 

    This article presents information on soft dollars and other brokerage arrangements. Over the past year or so, the issue of "soft dollars" has been the subject of increased media and regulatory attention. The term is not specifically defined in any rule or statute, and at times has been used...

  • Advisors Want More Help on Joint Ventures...  // Journal of Financial Planning;Aug2002, Vol. 15 Issue 8, p25 

    This article provides information that can be useful for financial planners, as of August 2002. Financial advisors are increasingly focusing on building joint ventures with other professionals, according to a study by CEG Worldwide, which advises financial professionals growing their businesses....

  • Financial Life Planning: Death of the Assumption. Diliberto, Roy; Anthony, Mitch // Journal of Financial Planning;Nov2002, Vol. 15 Issue 11, p42 

    This article argues that no matter how smart, well trained or experienced financial planners are, it does not give them the right to think for their clients or, more important, to assume how their clients might feel. Behind the services or products that financial planners provide are underlying...

  • Tracking the Trendy. Horan, Kirby // On Wall Street;Sep2005, Vol. 15 Issue 9, p79 

    Provides information on retail registered investment adviser (RIA) firms. Nature of the business operations of retail RIA firms; Definition of the life planning service offered by retail RIA firms; Actions taken by retail RIA firms to extend their wealth management services.

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