Friday, December 27, 2013
If you’re considering leaving your IRA to your kids but worry they’ll blow the tax advantages involved, you might want to use a tool called a trusteed IRA.
Trusteed IRAs are designed to provide for a long-term distribution plan for withdrawals. By limiting withdrawals to a minimum amount, IRA owners can prevent beneficiaries from immediately spending down the accounts. Trusteed IRAs may cost more to administer than plain IRAs, but they are cheaper than setting up a trust and less likely to run afoul of various tax rules.
See Kelly Greene, Trusteed IRAs Can Help Heirs Manage Inheritance, Market Watch, Dec. 19, 2013.