We are in a now all too familiar position. We don't know what the estate tax rules will be in 2013. The exemption amount is scheduled to drop back to $1,000,000 per person, and it will not be portable. We have no idea what Congress may or may not do about the situation. And, because 2012 is an election year, they may not do anything until late in 2013 or perhaps early in 2014. Do you need a trust to protect your estate tax exemption, or don't you? Should you name a trust as the beneficiary of your IRA, or not?
My crystal ball is not working. Is yours?
The spouse can be the primary beneficiary with the trust as contingent, in which case when the spouse disclaims the IRA, the IRA passes to the trust beneficiary. Or, the trust can be the beneficiary with the spouse as contingent. Then if the trust disclaims, the IRA will pass to the spouse.
IRAs, trusts, and disclaimers are complicated estate planning topics. Be sure to consult with knowledgeable advisors before naming a trust as your IRA beneficiary and be sure the beneficiary consults with an attorney before doing a disclaimer. You can find the names of Ed Slott-trained advisors on our website, www.irahelp.com.
-By Beverly DeVeny and Jared Trexler
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