Legal Question in Wills and Trusts in Arizona

Re: better to put IRA and 401K in Trust or designate beneficiary?

DO NOT put the IRA or 401(k) in the name of the Trust. You will lose your tax-deferred benefits (the "I" in IRA stands for "Indivual"-a trust or other 'non-person' cannot own it). I recommend you name your spouse (if you have one) as Primary beneficiary, with your Trust as Secondary beneficiary. You can name other persons as beneficiaries instead of the Trust, but if you do, then any conditions or controls set out in the Trust document will not have any effect on the IRA/401(k) recipient. For example, if your Trust says that a person has to survive you by a cetrain number of days, this term will not control if you name a person as beneficaiary of your IRA/401(k). This answer is pretty simplistic, so I recommend you consult with an attorney or accountant for more complete details.

Re: better to put IRA and 401K in Trust or designate beneficiary?

It depends on the size of the estate. If estate taxes are not an issue, then designating a beneficiary simpler and less expensive.