A Stand Alone Retirement Trust is a separate trust established for the primary benefit of being named as the beneficiary of a client’s retirement account, in the event the client passes away. Typically, with a retirement account such as an IRA, the client will name a spouse or a child as the primary or secondary beneficiary of the IRA. Upon passing away, the retirement plan administrator will contact the designated beneficiaries, who will typically be given the option of pulling all of the funds out of the account and take a check for the lump sum, or establishing an inherited IRA account or roll over IRA account, where the funds in the IRA account will be distributed over a period of time.
Rather than providing the beneficiary with the option of receiving a lump sum check, the client may establish a Retirement Trust, where the retirement proceeds will be paid or distributed to the Trust.
This type of trust is established as a separate or stand-alone trust, as the federal requirements of naming a trust as a beneficiary of a retirement account are very particular, and a standard Revocable Living Trust may not accomplish the objectives of the client or satisfy the requirements set forth by the government for ensuring that the retirement proceeds can be stretched out or deferred over the life expectancy of the beneficiary.Read Our Latest Firm News