Nevada residents who are creating an estate plan may want to consider setting up an IRA trust for their retirement account. An IRA trust can protect an account from creditors. It can also specify how distributions are made to beneficiaries. This may be useful if the beneficiaries are likely to be irresponsible with money or if they are very young. For example, a person who inherits a retirement account at the age of 18 or 21 may not know how to effectively manage money.
Other types of retirement plans, such as 401(k)s, have different rules associated with them, but they can also have an IRA trust as a beneficiary. Another consideration in making the beneficiary of an retirement plan an IRA trust is its worth. If the retirement account is worth more than $500,000, an IRA trust might be important for asset protection.
A person may choose between a conduit trust and an accumulation trust. With the former type, the trust essentially acts as a conduit with distributions going into the trust and then to the beneficiary. The latter type of trust allows distributions to accumulate. Trusts have costs attached to both setup and maintenance, so it is worth weighing their benefits against them.
People who are creating an estate plan may want to talk to an attorney about their goals. Trusts can be powerful tools for accomplishing a variety of different objectives. Many people may be aware of trusts as only being appropriate for wealthy familiesh, but trusts have a number of other uses as well. For example, trust planning may be a way to provide assistance for special needs relatives and give to charity.