Standalone trust in its very first page is clearly established to meet the requirements of a designated beneficiary trust, it’s much easier for a custodian to read, understand and implement it. When these designated beneficiary trust provisions are buried inside a larger living trust, it often winds up with the custodian delegating their decision to their legal department which can hold up the process of implementing the trust in a timely manner.
By having a standalone trust, it alerts the beneficiaries to the fact that IRAs have special treatment and makes it less likely that the beneficiaries (including a beneficiary that may be serving as Trustee) will immediately go to the custodian and cash out the IRA or take other actions that may have adverse tax consequences. When we do our IRA Inheritance Trust®, it comes with a checklist of actions for the Trustee and beneficiary to follow, in order to avoid these types of inadvertent mistakes.
To learn more or get started on your estate plan, just schedule a time to visit us for a no obligation complimentary consultation.