Beneficiaries of Life Insurance & Retirement Accounts to Trust
In the process of setting up a revocable living trust. Attorney is requesting to change all life insurance and retirement accounts beneficiaries to the trust. I don’t think this is right after viewing your video on RLT. Currently, they are primary spouse then contingent son. Son is a married, healthy, stable adult. Thanks.
Terry Says
Hmmm, I don’t know why he would make that suggestion. Re the retirement accounts, your spouse as beneficiary gets to take RMDs over a longer period than the trust would get to distribute the assets. So that doesn’t make sense. And your son would have to take the distributions from an inherited IRA over 10 years — but still it would be his money to take if he needed it earlier. Since he is healthy and smart, he should be the direct beneficiary.
Now, who is the successor trustee of the RLT if you cannot act? Is it your wife? Or did the lawyer put himself as successor trustee?? If he/she did that, and then the trust becomes life insurance beneficiary, he might have ulterior motives. Other than that, no reason not to make the RLT the beneficiary of your life insurance. Then it can be distributed according to the instructions in the trust.
