The "look through" trust can affords long term IRA deferrals and special protection or tax benefits for the family. But, as with all specialized tools, you must use it only in the right situation. If the IRA participant names a trust as beneficiary, and the trust meets certain requirements, for purposes of calculating minimum distributions after death, one can "look through" the trust and treat the trust beneficiary as the designated beneficiary of the IRA. You can then use the beneficiary's life expectancy to calculate minimum distributions. Were it not for this "look through" rule, the IRA or plan assets would have to be paid out over a much shorter period after the owner's death, thereby losing long term deferral.
A New Hampshire Irrevocable Trust as a Designated Beneficiary of an Individual Retirement Account (IRA) is a legal arrangement in which an individual's IRA assets are held and managed by a trust established in accordance with the laws of New Hampshire. This type of trust serves as a beneficiary of the IRA and provides a range of benefits and potential advantages for the account holder and their beneficiaries. One key advantage of utilizing a New Hampshire Irrevocable Trust as the designated beneficiary of an IRA is the ability to control the distribution and management of the assets after the account holder's passing. By designating the trust as the beneficiary, the account holder can establish specific instructions and conditions for the distribution of funds, ensuring their wishes are carried out even after they are no longer able to manage the IRA themselves. There are several types of New Hampshire Irrevocable Trusts that can be designated as the beneficiary of an IRA, including: 1. Conduit Trust: This type of trust requires the distribution of annual Required Minimum Distributions (Rods) to the trust's beneficiaries. The distributions are taxed at the beneficiaries' individual tax rates. The trust acts as a "conduit" for the distributions and does not accumulate any additional income or principal. 2. Accumulation Trust: Unlike a conduit trust, this type of trust allows for the accumulation of income and principal within the trust. The trustee has discretion over the timing and amount of distributions to the beneficiaries. This can be advantageous for beneficiaries who do not require immediate distributions and prefer to defer taxation. 3. Discretionary Trust: A discretionary trust grants broad discretion to the trustee regarding distributions to beneficiaries. The trustee decides when and how much to distribute, taking into consideration the individual circumstances and needs of the beneficiaries. This type of trust provides maximum flexibility in managing and distributing the IRA assets. 4. Charitable Remainder Trust: By designating a charitable remainder trust as the beneficiary of an IRA, the account holder can leave a portion of the IRA assets to charity while providing income to non-charitable beneficiaries for a specified period or their lifetime. This arrangement can have potential estate tax benefits and also support charitable causes. It is important to consult with an experienced estate planning attorney or financial advisor when considering a New Hampshire Irrevocable Trust as the designated beneficiary of an IRA. They can provide guidance tailored to your specific situation, ensuring that your assets are effectively protected, managed, and distributed according to your wishes.A New Hampshire Irrevocable Trust as a Designated Beneficiary of an Individual Retirement Account (IRA) is a legal arrangement in which an individual's IRA assets are held and managed by a trust established in accordance with the laws of New Hampshire. This type of trust serves as a beneficiary of the IRA and provides a range of benefits and potential advantages for the account holder and their beneficiaries. One key advantage of utilizing a New Hampshire Irrevocable Trust as the designated beneficiary of an IRA is the ability to control the distribution and management of the assets after the account holder's passing. By designating the trust as the beneficiary, the account holder can establish specific instructions and conditions for the distribution of funds, ensuring their wishes are carried out even after they are no longer able to manage the IRA themselves. There are several types of New Hampshire Irrevocable Trusts that can be designated as the beneficiary of an IRA, including: 1. Conduit Trust: This type of trust requires the distribution of annual Required Minimum Distributions (Rods) to the trust's beneficiaries. The distributions are taxed at the beneficiaries' individual tax rates. The trust acts as a "conduit" for the distributions and does not accumulate any additional income or principal. 2. Accumulation Trust: Unlike a conduit trust, this type of trust allows for the accumulation of income and principal within the trust. The trustee has discretion over the timing and amount of distributions to the beneficiaries. This can be advantageous for beneficiaries who do not require immediate distributions and prefer to defer taxation. 3. Discretionary Trust: A discretionary trust grants broad discretion to the trustee regarding distributions to beneficiaries. The trustee decides when and how much to distribute, taking into consideration the individual circumstances and needs of the beneficiaries. This type of trust provides maximum flexibility in managing and distributing the IRA assets. 4. Charitable Remainder Trust: By designating a charitable remainder trust as the beneficiary of an IRA, the account holder can leave a portion of the IRA assets to charity while providing income to non-charitable beneficiaries for a specified period or their lifetime. This arrangement can have potential estate tax benefits and also support charitable causes. It is important to consult with an experienced estate planning attorney or financial advisor when considering a New Hampshire Irrevocable Trust as the designated beneficiary of an IRA. They can provide guidance tailored to your specific situation, ensuring that your assets are effectively protected, managed, and distributed according to your wishes.
