Legal Question in Wills and Trusts in California

IRA Inheritance Implications

Does it make sense to have a "Living Trust" when the bulk of one's assets are in IRA's? When one spouse dies with a will and the community property laws come into play, the other spouse inherits the deceased's IRA. What about if both spouses die in an accident and there are no other contingent beneficiaries named in the IRA's? Does that mean both IRA's will need to go through probate? Should the wills specify the IRA distribution wishes? Would naming the children as contingent beneficiaries make sense? Is there any way to avoid this, short of a Living Trust??

Thanks,


Asked on 5/14/00, 11:05 pm

2 Answers from Attorneys
Barry Jorgensen The Law Office of Barry S. Jorgensen

Re: IRA Inheritance Implications

Yes, name the children as contingent beneficiaries in your IRA's and no livimg trust would be "necessary" for the protection of these assets from probate. Omly if your estate is large enough to use up the lifetime exemption for

both spouses would a trust be an approprirate vehicle to limit estate taxes on the death of the second spouse.

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Answered on 7/03/00, 11:54 pm
WILLIAM BRANDWEIN WILLIAM A. BRANDWEIN, A PROFESSIONAL LAW CORP.

Re: IRA Inheritance Implications

When there is a named beneficiary in an IRA it won't pass through probate as it is a non probate asset. The children should be named as contingent beneficiaries. To have a trust as a beneficiary could be tricky and should be done with care. Usually an IRA beneficiary designation is made with the spouse as primary and children as secondary. This should be done before the required beginning date for distributions which is age 70 1/2.

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Answered on 7/04/00, 12:54 am


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