How to Make Your Retirement Fund and Trust Work Together for Your Family

How to Make Your Retirement Fund and Trust Work Together for Your Family

It is possible to make your retirement funds work hand in hand with your trusts and other estate planning. Making your trust the beneficiary of your retirement plan is one of the main ways to do this.

At first, the reason may seem obvious. You want to put everything you can into your trust so it doesn’t go through probate. But this is not the reason for making your trust the beneficiary of your retirement account. After all, your retirement account passes directly to the named beneficiary, so it will never go through probate. So what is the reason for making your trust the beneficiary? Here are two good reasons:

• Keeps your beneficiaries from removing the funds prematurely – If you pass away while your spouse is still under the retirement age, you don’t want them making a mistake that could cost a lot of money by removing the funds from the account too early and receiving a penalty.
• Keeps your beneficiaries from removing too much from the fund at once – Taking retirement funds in a lump sum can result in huge amounts of taxation. Your successor trustee can help your beneficiary to understand the consequences and to make better decisions.

Planning Ahead for Your Family’s Needs

The estate planning attorneys at Petrov Law Firm can help you to make things easier for your family. Call us today at 619-344-0360 to set up an estate plan that really works for your needs.