IRA in Idaho Family Trust in Boise, Meridian, & Eagle?

IRA in Idaho Family Trust in Boise, Meridian, & Eagle?

To successfully use an Idaho Family Trust or Living Trust to avoid probate, it is important to make certain that all of your property is moved into the trust.  That includes real estate, bank accounts, stocks and bonds, and automobiles.

If significant property is left out of the trust, especially if it is Boise, Eagle, Meridian, or Star real estate for which title is in your individual name, probate will be required just to move that property into the trust where it can then be dealt with in the manner you have directed.  Likewise, if you rely on a Last Will and Testament to settle your affairs, probate is also required. 

But one potential problem in this scenario arises from the fact that, by federal law, IRA and other similar retirement accounts can only be held in the name of the employee who created the account.  Changing those accounts directly into the name of your Idaho living trust is prohibited.

But there is a solution:  It is permissible to designate your trust as the “payable on death” beneficiary named for the account.  Under this arrangement, the account remains in the name of the employee until either the account is drawn down to a zero balance or the employee passes away.  But if there are still funds in the account when the employee passes away, the bank then is legally instructed to pay those funds to the trust for handling under the terms of the trust.  This permits those funds to come under the trust without having to go through the probate process.

To accomplish this, simply ask your bank to designate your living trust as the “payable on death” or “POD” beneficiary on you IRA or other similar account.  That’s all there is to it.

For other ideas to keep your living trust simple to use, visit the “Question & Answers” section at http://barrypeters-law.com.