What is a Trusteed IRA?

Individuals may have many concerns regarding their retirement accounts. This includes concerns about what will happen with anything that is left over in these accounts when they die. So, the after-death distribution of retirement savings is among the many things a person may want to control.

One of the ways to control what happens with such savings after death that some of our readers may have heard of is a trusteed IRA.

This is a special kind of IRA that is managed by a trustee. Among the things a person can set such an IRA up to do is to split into separate accounts, with the trustee controlling what happens with each of these accounts after the IRA holder passes away pursuant to the terms of the trusteed IRA. Each of the separate accounts can have its own rules regarding distribution. So, there are a diverse range of controls a person could put into a trusteed IRA.

Among the benefits these accounts can have as a way to control what happens with retirement savings after death is that they can be simpler than some of the other options and provide a lot of flexibility in the types of controls they can allow a person to assert regarding distribution.

Meanwhile, the drawbacks of such accounts include that that they can be more expensive than regular IRAs, that they may not be well-suited for smaller amounts of savings and that there are limits to the types of terms they can have.

Now, trusteed IRAs certainly aren’t the only way a person can assert control over the after-death distribution of their retirement savings. Other ways include setting the beneficiary designations in traditional retirement accounts or setting up a traditional retirement account to go into a trust.

As this illustrates, there are many ways a person could try to control what happens with their different assets when they die. For each type of asset, which particular way would best help achieve a person’s control goals can vary quite a bit depending on the circumstances. This is why, when a person is trying to figure out how best to assert control over the after-death distribution of the various assets they have, including retirement assets, having a skilled lawyer’s guidance can be so crucial.

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