Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Naming Beneficiaries
Old 07-02-2007, 11:05 AM   #1
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 424
Naming Beneficiaries

If I set up a trust fund for my child( 8 ), must I name the 2nd beneficiary of my retirement accounts the trust fund or my child? My wife is 1st beneficiary.

Do beneficiaries named on life ins and 401k/IRA's take precedence over a will?


If so, how can my executor distribute my proceeds based on my will?



Thanks.
JD
__________________

__________________
JohnDoe is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-02-2007, 11:23 AM   #2
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
You can name the child as the beneficiary, but then the retirement account wouldn't go into the trust. If you want it in the trust you have to designate the trust as beneficiary.

Wills only pass along items not otherwise addressed. So if your life insurance and retirement accounts have named beneficiaries the assets never pass through the will and are unaffected by what the will says.
__________________

__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 07-02-2007, 11:23 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,019
Quote:
Originally Posted by JohnDoe View Post
If I set up a trust fund for my child( 8 ), must I name the 2nd beneficiary of my retirement accounts the trust fund or my child? My wife is 1st beneficiary.
Do beneficiaries named on life ins and 401k/IRA's take precedence over a will?
If so, how can my executor distribute my proceeds based on my will?
Thanks.
JD
From personal experience as a beneficiary, executrix and testatrix, trusts are not included in your estate. Trust funds are settled independently of your will and are excluded from probate (which can be very helpful from a tax point of view). You could give funds to your child in trust or could bequeath them to him/her in your will, depending on personal preference. Just set up the two documents so that they articulate together to result in your targeted "postmortem asset allocation".
__________________
Meadbh is offline   Reply With Quote
Old 07-02-2007, 11:55 AM   #4
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 424
Couple more questions...

What if I want 90% to go to my child and the rest to go to a few different people?

What if all 3 of us go at once, everything goes to the estate and is split based on my will?

How much info should I tell my trustee? I don't really want to reveal that the account would be over 1 million. I do have explicit instructions on how to distro the trust, though.

Thanks.
__________________
JohnDoe is offline   Reply With Quote
Old 07-02-2007, 12:03 PM   #5
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
You are getting too complicated and I don't have enough facts.

I will say that most states have a set of rules about what happens when everyone "goes at once." There may be certain presumptions about who actually died first or that deaths were actually simultaneous. You will need to talk to your lawyer about what happens if you all go at once.

The specific instructions on how to distribute the trust need to be in the trust document. Your trustee doesn't necessarily need to know at this time how much money there will be in the trust.

I think it is time for a sit down with your estate planner.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 07-02-2007, 12:46 PM   #6
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by Martha View Post
I think it is time for a sit down with your estate planner.
What Martha said.

Because IIRC an IRA in a trust cannot have its distributions stretched out over the life of the beneficiary. I don't have a reference or even remember the specific rule, but I have a clear memory of "IRAs in trusts: bad."
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
However leaving it directly to a minor
Old 07-02-2007, 04:41 PM   #7
Recycles dryer sheets
aenlighten's Avatar
 
Join Date: Apr 2007
Posts: 275
However leaving it directly to a minor

won't happen either. The court will intervene to establish guardianship and place it in their hands, so be sure to name a guardian.
__________________

__________________
aenlighten is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Poll for Naming my Daughter laurence Other topics 45 02-03-2007 09:17 PM

 

 
All times are GMT -6. The time now is 02:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.