Sometimes there’s nothing else to do but to trust in a trust. When it comes to estate planning, folks who have retirement accounts in Arkansas can have a primary and contingent beneficiary — a person or body standing to get the account when the owner is deceased. Beneficiaries get these plans directly, avoiding the probate process. When minor or special needs children are named as beneficiaries, having a trust as a beneficiary may be a wise planning decision.
A trust may also be beneficial as a way of sidestepping estate taxes of a surviving spouse. Assets go to the trust upon death, rather than to a spouse. The main downside to having a trust as a beneficiary is that certain retirement plans are subject to required minimum distribution (RMD) payouts. If there is more than one beneficiary on the plan, those payouts will be calculated based on the life expectancy of the eldest beneficiary.
On the other hand, if individual beneficiaries are named, the RMD is calculated on the individual’s life expectancy, which could earn each person more money. Only an IRA owner can change the beneficiaries of his or her IRA. There are some exceptions, however, upon which legal counsel could shed light.
There are so many ways to write an all-encompassing estate plan. Many people don’t realize the benefits of trusts in this respect. The process may not seem so arduous with the advice and guidance of an Arkansas estate planning attorney. A lawyer can provide suggestions on how a trust can be of benefit to his or her clients’ heirs, giving them as much as possible from the estate.