September 17, 2025 • 15 mins
This week, Todd Lutsky explains the process and benefits of naming beneficiaries on IRAs and how income taxes are paid when the estate is the beneficiary.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
This is Ask Todd on the Financial Exchange Radio network.
If you have an existing estate plan or in the
market for one, Todd Letsky is here to answer your
questions and help you plan for a later life. Ask
Todd is presented by Cushing and Dolan, serving Massachusetts and
New England for more than thirty five years, helping families
with a state and tax planning, medicaid planning, and probate law.
(00:22):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (00:27):
Todd Lutsky does join us now from the law firm
of Cushing and Dolan. The segment here is Ask Todd,
and this is your chance to ask Todd your state
planning questions live on air right now. Phone lines are
open at eight eight eight to zero five two two
sixty three. Get calling early and often if you want
(00:48):
to ask Todd your estate planning questions, because we do
have limited space on those phone lines.
Speaker 3 (00:54):
Again, eight eight.
Speaker 2 (00:55):
Eight to zero five two two sixty three is the
number one more time, that is eight eight eight two
zero five two two six three, And this is your
opportunity to ask Todd your estate planning questions. Mister Lutsky,
how are you doing today.
Speaker 3 (01:12):
I am never better. How are you doing? I'm good?
Speaker 2 (01:15):
I uh. I was pretty intrigued by that story over
the weekend about the duck that robbed the bank.
Speaker 3 (01:21):
I must have missed that story. Yeah, he quacked the safe.
Well that's that's true.
Speaker 2 (01:25):
Yeah, pretty impressive stuff, Todd. I want to talk to
you about beneficiary designations on iras and specifically, how does
it let me ask you this? I guess, is there
a conflict or a question in terms of potentially naming
(01:46):
a trust as a beneficiary of an IRA in order
to help manage estate taxes in the future with trying
to navigate the tenure withdraw rule that you have when
that trust is named to beneficiary and perhaps ending up
(02:08):
with your bennies paying more in taxes than they would
otherwise in income taxes, correct, more income taxes than a
state taxes that they would have paid.
Speaker 4 (02:16):
I think you got a great question there, because there's
a lot of balls in the air, right.
Speaker 3 (02:21):
So one would be, you know, we haven't when you're dealing.
Speaker 2 (02:23):
And someone asked me this the other day and I said,
I don't know, but I have an estate planning attorney.
Speaker 3 (02:27):
I'm going to ask.
Speaker 2 (02:27):
So this is you know, a real question that I
got from someone.
Speaker 3 (02:31):
Real life stuff. That's what we do, real life stuff.
Speaker 4 (02:34):
And iras are complicated, right, because they do have as
you are alluding to, Chuck, they have both the income
tax component built into it and as many people forget,
an estate tax component built into it. Even like with rots,
they think, oh, well they're roths are income tax free, Yeah,
but they're estate taxable, sure, And so you got to
(02:55):
remember that they have those two components built in it. Now,
first and forem, when we're talking about naming a trust,
a beneficiary, or in general dealing with an IRA in
your estate plan, let's start primary beneficiary. If you're marriage
should probably always be I don't want to say always,
there's never an always, but mostly be surviving spouse.
Speaker 2 (03:16):
Why wouldn't you do the trust in that case, because
that's specifically kind of what this is looking at.
Speaker 4 (03:20):
Yeah, so generally you want it to be the surviving spouse.
Because of that RMD the required minimum Distribution rules, right,
spouses are one of the few special beneficiaries under the
Secure Act. When the Secure Act changed. So example, if
I leave, if I name my spouse the designated beneficiary,
(03:43):
and my spouse Let's say when I die is seventy five,
my spouse gets to take it out over her life expectancy.
If you look at a table, her life expectancy could
be twelve, thirteen years, fourteen years. So that's a nice payout,
better than if I name my children the beneficiary. It's
going to come out over ten years most of the time,
(04:05):
unless the child is a minor or disabled, So mostly
this is going to come out over ten years. So
there's a ten year rule, not a lifetime rule. The
old rule used to be yeah, I would come out
over the kids' life expectancy, but no more so. Now
it comes out over ten years. So that's why the
primary beneficiary is usually the spouse. Now that said, what
(04:28):
if I'm the surviving spouse, Now, who should do the
primary beneficiary be? Well, I need to look to my
revocable trust. Let's say if that's what I've done. Well,
if my trust, which holds a bunch of my assets,
says I leave everything equally to my kids, but held
in trust for their life, divorce proof, creditor protected, generation skipping,
(04:49):
tax planning, all built in, well, maybe I don't want
my million dollar IRA going out to my kids so
I probably wouldn't name the kids. I would name the
trust as the beneficial if I'm now the surviving spouse,
our single and that way it gets into the trust,
sheltering it from all of those negative creditors tax or
(05:10):
creditor issues and even generation skipping tax problems. But to
your point, Chuck, not causing a problem with the ten
year payout, So no conflict with the ten year payout.
It's still gonna come out over ten years. No better,
but no worse.
Speaker 2 (05:26):
Talking with Todd Lutsky from Cushing and Dolan. If you've
got a question for Todd, this is your chance to
ask it. Eight eight eight two zero five two two
sixty three is the number to call. We do still
have a little bit of room on the phone lines,
so call eight eight eight to zero five two two
sixty three to ask Todd your estate planning questions. That
(05:46):
number again is eight eight eight to zero five two
two sixty three. We're gonna take a quick break here,
but when we come back it is going to be
right to your questions with Todd. That phone number one
more time is eight eight eight to zero five two
two six three.
Speaker 1 (06:04):
Ask Todd with Todd Lutsky every Wednesday at ten thirty
only here on the Financial Exchange Radio Network. Todd Letsky
answers your questions about a state and elder life planning
every Wednesday at ten thirty, right here on the Financial
Exchange Radio Network.
Speaker 2 (06:28):
Still a little bit of room on the phone lines
if you've got a question for Todd Lutsky. Eight eight
eight to zero five two two sixty three is the
number again? It is eight eight eight to zero five
two two six three. Let's go now to Bob in Charlestown. Bob,
what's your question for Todd?
Speaker 5 (06:48):
Good morning? My question concerns the income tax aspects of
the four oh one K when it goes through the
testaments Retrust soap. So, if there's no surviving spouse and
the four oh one K is the beneficiary, is the
estate got it? None of the will? It passes into
(07:09):
the testamentary Trust. So now I presume the trust will
now own the four oh one k. And since the
beneficiaries are the children and not a surviving spouse, is
the trust required to pay out that money to the
kids in the tenure SIP frame as if it had
never gone to the trust.
Speaker 4 (07:28):
So we have to sort of clarify your question, because
the question you're answering is one that I likely would
never suggest. Okay, So when I talk about naming the
estate the beneficiary, that's when you are married, you do that.
Speaker 3 (07:48):
Okay.
Speaker 4 (07:49):
So if you're married, and so we got husband and wife, right,
and they both have you're saying four one K. But
let's say they've retired and they've rolled their four oh
one K into an IRA. It's the same deal, right,
And so now we're married, and I've got this iras
sitting there, and I'm over seventy three years of age
or seventy three Okay, unless the IRA is small enough
(08:12):
that a five year payout doesn't matter. But let's say
it's large enough that I don't want a five year payout.
So I got to make sure I'm seventy three years
of age or older. That's the first requirement, and that
makes it payable over the ghost life expectancy of the participant.
So that's huge. So now I don't have a negative
(08:35):
income tax consequences. Then I die, well, then the estate
it would flow into a testamentary trust for the benefit
of who my spouse right first and foremost. If my
spouse has already died. Well, then I usually get a
call from the surviving spouse saying I lost my spouse.
Speaker 3 (08:57):
What do I do?
Speaker 4 (08:57):
We update their estate plan because they're now single after all,
and we need to make some changes to their plan.
And one of those changes would be okay, well, we
now need to rethink your designated beneficiary because you're single.
So as a single person, I probably would go back
to the idea of what Chuck and I were talking
about a minute ago, and that is I would probably
(09:19):
not name the estate the beneficiary. Well, why because I
don't have a spouse, right. The whole point of naming
the estate the beneficiary is so that I can provide
for my spouse, just like I could if I named
her the beneficiary. But at the same time, instead of
(09:40):
naming her as the beneficiary, I am allowing her to
not only enjoy it, but if she gets sick, it's
immediately protected from the nursing home for her. To me,
that's the big reason for doing this. Yeah, there's some
mistate tax benefits as well, but to me, that's a
really big reason, you know, for doing this. So if
I don't have that spouse, well, I'm not so worried
(10:01):
about it, right, because it's mine and if I get sick,
it's outside the trust, it's subject to the nursing home.
If I die, I wanted to go probably to my
trust for the benefit of my kids, divorce, prove credit
or protection and whatever other kind of controls I want
to put over it to them. Now that's set. So
my answer, so, I think your point is that you're hypothetical.
(10:23):
I would never do so if I was single, I
wouldn't be naming my estate the beneficiary in which the
Testamentary Trust would be the children. Now having said that,
I guess the question could be, what if we've done this,
my wife's alive, it flows into this testamentary trust, then
my wife dies, Well, well that's different. Well that could happen. So, Bob,
(10:47):
I just wanted to help everybody understand that difference and
how this could not generally be set up that way,
but it could end up that it's now for the kids.
The required minimum distributions will come out and hit the
trust over the ten year rule that we talked about.
So now the kids are the beneficiaries. If this trust
says paid out to the kids divided equally and paid
(11:09):
out to the kids. Well, then as the money comes
into the trust, it comes out to the kids. The
kids pick it up on their income tax return and
that's the end of it. If it's completely a payout,
then the whole entire ira could technically just flow through
and go right to the kids, and then they can
take it out over ten years at tax at their rate.
If it's held in divorce proof credit or protection language like,
(11:31):
hold it in trust for the benefit of the kids
and you know, let them have income and principle and
the trustees sole discretion, which I like. Well, then you
have to make a decision. And you're absolutely right about this,
Bob that if that money comes out the minimum distribution
you reach in, take it out, put it in the trust.
That's a taxable event to the trust. If the trust
(11:53):
then distributes out that income to the beneficiary, well then
they can carry an income distribution deduction, have a tax
at the kids level. If the kid's going through a
divorce and we don't want the money to come out,
well then you know what, we're going to have to
pay the tax at the trust level. So yes, you
could have that issue, but it's kind of optional. So
(12:14):
great question Bob lots going on in that question. Sorry
it was such a long winded answer, but it's important
because it really does deal with what this guide is
talking about this month, right. This guide is saying, how
do you name your IRA the beneficiary? Not only how
do you do it? When do you do it? Why
do you do it right? And same thing with life insurance.
(12:34):
You can make the life insurance the beneficiary and age
is not an issue, but with an IRA, as we saw,
the age should be at least the required required beginning
date of seventy three.
Speaker 3 (12:45):
That's all laid out in the guide.
Speaker 4 (12:46):
It explains the Testamentary Trust, how it's connected with these assets,
and will then help you do a state tax planning.
It will protect it from the nursing home without a
five year waiting period and all without causing adverse income
tax consequences, which I hope I just explained in this
in this to Bob, in this in this call eight
(13:09):
six six eight four eight five six nine nine is
the guide, folks, or a legal exchange show dot com.
This guide explains all of those things and how they
work together. Call and Get It eight six six eight
four eight five six nine nine or Legal Exchange show
dot com.
Speaker 2 (13:27):
Todd just kind of looking at that situation that we
outlined earlier, any other considerations, just for you know, how
someone goes about making the decision for naming beneficiaries on
retirement accounts given the complexities that we went through.
Speaker 3 (13:44):
Yeah, I'd say a couple of things. One, the size
of the IRA.
Speaker 4 (13:47):
Right, So if someone's trying to do planning and they say, well,
you know, I got one hundred thousand dollars in my IRA,
Well one, you know, maybe I don't care about trying
to protect that from the nursing home. Maybe it's small
enough that I'll just leave my spouse the beneficiary and
I don't need to go to probate for that. So
that could be or the size could be you know,
one hundred, two hundred, even three hundred thousand dollars. You know,
(14:08):
if I got to pay that out over five years,
that's not a huge income tax hit, right, you know,
I'm not taking out a ton of money. If I've
got three hundred thousand over five years, that's not going
to blow me into a higher income tax bracket. So
maybe I don't need to wait until I'm seventy three.
I can just set that up right away. So those
(14:28):
are some options. And I think if you're not doing
nursing home planning, certainly we're never going to be doing
a testamentary trust if we're not doing nursing home planning.
But I still might name the estate. I still might
name the trust the beneficiary on a revocable trust, I
would say you would do that primarily only if the
way you're leaving the assets to the spout to the
(14:49):
kids is to protect it from divorces and generation skipping
tax purposes. Otherwise, probably just named the kids. Mister Wutski,
thank you so much for joining us today.
Speaker 3 (14:57):
Always a pleasure.
Speaker 1 (14:59):
This has been Ask Todd on the Financial Exchange Radio network.
Ask Todd with Todd. Lutsky has been presented by Cushing
and Dolan, serving Massachusetts and New England for more than
thirty years, helping families with the state and tax planning,
Medicaid planning, and probate law. Call eight hundred three nine
three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(15:19):
Cushing and Dolan. Armstrong Advisory does not provide any legal
or tax advice. Please consult with your illegal or tax
advisor on such matters. Cushing and Armstrong do not endorse
each other and are not affiliated
This is Ask Todd on the Financial Exchange Radio network.
If you have an existing estate plan or in the
market for one, Todd Letsky is here to answer your
questions and help you plan for a later life. Ask
Todd is presented by Cushing and Dolan, serving Massachusetts and
New England for more than thirty five years, helping families
with a state and tax planning, medicaid planning, and probate law.
(00:22):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (00:27):
Todd Lutsky does join us now from the law firm
of Cushing and Dolan. The segment here is Ask Todd,
and this is your chance to ask Todd your state
planning questions live on air right now. Phone lines are
open at eight eight eight to zero five two two
sixty three. Get calling early and often if you want
(00:48):
to ask Todd your estate planning questions, because we do
have limited space on those phone lines.
Speaker 3 (00:54):
Again, eight eight.
Speaker 2 (00:55):
Eight to zero five two two sixty three is the
number one more time, that is eight eight eight two
zero five two two six three, And this is your
opportunity to ask Todd your estate planning questions. Mister Lutsky,
how are you doing today.
Speaker 3 (01:12):
I am never better. How are you doing? I'm good?
Speaker 2 (01:15):
I uh. I was pretty intrigued by that story over
the weekend about the duck that robbed the bank.
Speaker 3 (01:21):
I must have missed that story. Yeah, he quacked the safe.
Well that's that's true.
Speaker 2 (01:25):
Yeah, pretty impressive stuff, Todd. I want to talk to
you about beneficiary designations on iras and specifically, how does
it let me ask you this? I guess, is there
a conflict or a question in terms of potentially naming
(01:46):
a trust as a beneficiary of an IRA in order
to help manage estate taxes in the future with trying
to navigate the tenure withdraw rule that you have when
that trust is named to beneficiary and perhaps ending up
(02:08):
with your bennies paying more in taxes than they would
otherwise in income taxes, correct, more income taxes than a
state taxes that they would have paid.
Speaker 4 (02:16):
I think you got a great question there, because there's
a lot of balls in the air, right.
Speaker 3 (02:21):
So one would be, you know, we haven't when you're dealing.
Speaker 2 (02:23):
And someone asked me this the other day and I said,
I don't know, but I have an estate planning attorney.
Speaker 3 (02:27):
I'm going to ask.
Speaker 2 (02:27):
So this is you know, a real question that I
got from someone.
Speaker 3 (02:31):
Real life stuff. That's what we do, real life stuff.
Speaker 4 (02:34):
And iras are complicated, right, because they do have as
you are alluding to, Chuck, they have both the income
tax component built into it and as many people forget,
an estate tax component built into it. Even like with rots,
they think, oh, well they're roths are income tax free, Yeah,
but they're estate taxable, sure, And so you got to
(02:55):
remember that they have those two components built in it. Now,
first and forem, when we're talking about naming a trust,
a beneficiary, or in general dealing with an IRA in
your estate plan, let's start primary beneficiary. If you're marriage
should probably always be I don't want to say always,
there's never an always, but mostly be surviving spouse.
Speaker 2 (03:16):
Why wouldn't you do the trust in that case, because
that's specifically kind of what this is looking at.
Speaker 4 (03:20):
Yeah, so generally you want it to be the surviving spouse.
Because of that RMD the required minimum Distribution rules, right,
spouses are one of the few special beneficiaries under the
Secure Act. When the Secure Act changed. So example, if
I leave, if I name my spouse the designated beneficiary,
(03:43):
and my spouse Let's say when I die is seventy five,
my spouse gets to take it out over her life expectancy.
If you look at a table, her life expectancy could
be twelve, thirteen years, fourteen years. So that's a nice payout,
better than if I name my children the beneficiary. It's
going to come out over ten years most of the time,
(04:05):
unless the child is a minor or disabled, So mostly
this is going to come out over ten years. So
there's a ten year rule, not a lifetime rule. The
old rule used to be yeah, I would come out
over the kids' life expectancy, but no more so. Now
it comes out over ten years. So that's why the
primary beneficiary is usually the spouse. Now that said, what
(04:28):
if I'm the surviving spouse, Now, who should do the
primary beneficiary be? Well, I need to look to my
revocable trust. Let's say if that's what I've done. Well,
if my trust, which holds a bunch of my assets,
says I leave everything equally to my kids, but held
in trust for their life, divorce proof, creditor protected, generation skipping,
(04:49):
tax planning, all built in, well, maybe I don't want
my million dollar IRA going out to my kids so
I probably wouldn't name the kids. I would name the
trust as the beneficial if I'm now the surviving spouse,
our single and that way it gets into the trust,
sheltering it from all of those negative creditors tax or
(05:10):
creditor issues and even generation skipping tax problems. But to
your point, Chuck, not causing a problem with the ten
year payout, So no conflict with the ten year payout.
It's still gonna come out over ten years. No better,
but no worse.
Speaker 2 (05:26):
Talking with Todd Lutsky from Cushing and Dolan. If you've
got a question for Todd, this is your chance to
ask it. Eight eight eight two zero five two two
sixty three is the number to call. We do still
have a little bit of room on the phone lines,
so call eight eight eight to zero five two two
sixty three to ask Todd your estate planning questions. That
(05:46):
number again is eight eight eight to zero five two
two sixty three. We're gonna take a quick break here,
but when we come back it is going to be
right to your questions with Todd. That phone number one
more time is eight eight eight to zero five two
two six three.
Speaker 1 (06:04):
Ask Todd with Todd Lutsky every Wednesday at ten thirty
only here on the Financial Exchange Radio Network. Todd Letsky
answers your questions about a state and elder life planning
every Wednesday at ten thirty, right here on the Financial
Exchange Radio Network.
Speaker 2 (06:28):
Still a little bit of room on the phone lines
if you've got a question for Todd Lutsky. Eight eight
eight to zero five two two sixty three is the
number again? It is eight eight eight to zero five
two two six three. Let's go now to Bob in Charlestown. Bob,
what's your question for Todd?
Speaker 5 (06:48):
Good morning? My question concerns the income tax aspects of
the four oh one K when it goes through the
testaments Retrust soap. So, if there's no surviving spouse and
the four oh one K is the beneficiary, is the
estate got it? None of the will? It passes into
(07:09):
the testamentary Trust. So now I presume the trust will
now own the four oh one k. And since the
beneficiaries are the children and not a surviving spouse, is
the trust required to pay out that money to the
kids in the tenure SIP frame as if it had
never gone to the trust.
Speaker 4 (07:28):
So we have to sort of clarify your question, because
the question you're answering is one that I likely would
never suggest. Okay, So when I talk about naming the
estate the beneficiary, that's when you are married, you do that.
Speaker 3 (07:48):
Okay.
Speaker 4 (07:49):
So if you're married, and so we got husband and wife, right,
and they both have you're saying four one K. But
let's say they've retired and they've rolled their four oh
one K into an IRA. It's the same deal, right,
And so now we're married, and I've got this iras
sitting there, and I'm over seventy three years of age
or seventy three Okay, unless the IRA is small enough
(08:12):
that a five year payout doesn't matter. But let's say
it's large enough that I don't want a five year payout.
So I got to make sure I'm seventy three years
of age or older. That's the first requirement, and that
makes it payable over the ghost life expectancy of the participant.
So that's huge. So now I don't have a negative
(08:35):
income tax consequences. Then I die, well, then the estate
it would flow into a testamentary trust for the benefit
of who my spouse right first and foremost. If my
spouse has already died. Well, then I usually get a
call from the surviving spouse saying I lost my spouse.
Speaker 3 (08:57):
What do I do?
Speaker 4 (08:57):
We update their estate plan because they're now single after all,
and we need to make some changes to their plan.
And one of those changes would be okay, well, we
now need to rethink your designated beneficiary because you're single.
So as a single person, I probably would go back
to the idea of what Chuck and I were talking
about a minute ago, and that is I would probably
(09:19):
not name the estate the beneficiary. Well, why because I
don't have a spouse, right. The whole point of naming
the estate the beneficiary is so that I can provide
for my spouse, just like I could if I named
her the beneficiary. But at the same time, instead of
(09:40):
naming her as the beneficiary, I am allowing her to
not only enjoy it, but if she gets sick, it's
immediately protected from the nursing home for her. To me,
that's the big reason for doing this. Yeah, there's some
mistate tax benefits as well, but to me, that's a
really big reason, you know, for doing this. So if
I don't have that spouse, well, I'm not so worried
(10:01):
about it, right, because it's mine and if I get sick,
it's outside the trust, it's subject to the nursing home.
If I die, I wanted to go probably to my
trust for the benefit of my kids, divorce, prove credit
or protection and whatever other kind of controls I want
to put over it to them. Now that's set. So
my answer, so, I think your point is that you're hypothetical.
(10:23):
I would never do so if I was single, I
wouldn't be naming my estate the beneficiary in which the
Testamentary Trust would be the children. Now having said that,
I guess the question could be, what if we've done this,
my wife's alive, it flows into this testamentary trust, then
my wife dies, Well, well that's different. Well that could happen. So, Bob,
(10:47):
I just wanted to help everybody understand that difference and
how this could not generally be set up that way,
but it could end up that it's now for the kids.
The required minimum distributions will come out and hit the
trust over the ten year rule that we talked about.
So now the kids are the beneficiaries. If this trust
says paid out to the kids divided equally and paid
(11:09):
out to the kids. Well, then as the money comes
into the trust, it comes out to the kids. The
kids pick it up on their income tax return and
that's the end of it. If it's completely a payout,
then the whole entire ira could technically just flow through
and go right to the kids, and then they can
take it out over ten years at tax at their rate.
If it's held in divorce proof credit or protection language like,
(11:31):
hold it in trust for the benefit of the kids
and you know, let them have income and principle and
the trustees sole discretion, which I like. Well, then you
have to make a decision. And you're absolutely right about this,
Bob that if that money comes out the minimum distribution
you reach in, take it out, put it in the trust.
That's a taxable event to the trust. If the trust
(11:53):
then distributes out that income to the beneficiary, well then
they can carry an income distribution deduction, have a tax
at the kids level. If the kid's going through a
divorce and we don't want the money to come out,
well then you know what, we're going to have to
pay the tax at the trust level. So yes, you
could have that issue, but it's kind of optional. So
(12:14):
great question Bob lots going on in that question. Sorry
it was such a long winded answer, but it's important
because it really does deal with what this guide is
talking about this month, right. This guide is saying, how
do you name your IRA the beneficiary? Not only how
do you do it? When do you do it? Why
do you do it right? And same thing with life insurance.
(12:34):
You can make the life insurance the beneficiary and age
is not an issue, but with an IRA, as we saw,
the age should be at least the required required beginning
date of seventy three.
Speaker 3 (12:45):
That's all laid out in the guide.
Speaker 4 (12:46):
It explains the Testamentary Trust, how it's connected with these assets,
and will then help you do a state tax planning.
It will protect it from the nursing home without a
five year waiting period and all without causing adverse income
tax consequences, which I hope I just explained in this
in this to Bob, in this in this call eight
(13:09):
six six eight four eight five six nine nine is
the guide, folks, or a legal exchange show dot com.
This guide explains all of those things and how they
work together. Call and Get It eight six six eight
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dot com.
Speaker 2 (13:27):
Todd just kind of looking at that situation that we
outlined earlier, any other considerations, just for you know, how
someone goes about making the decision for naming beneficiaries on
retirement accounts given the complexities that we went through.
Speaker 3 (13:44):
Yeah, I'd say a couple of things. One, the size
of the IRA.
Speaker 4 (13:47):
Right, So if someone's trying to do planning and they say, well,
you know, I got one hundred thousand dollars in my IRA,
Well one, you know, maybe I don't care about trying
to protect that from the nursing home. Maybe it's small
enough that I'll just leave my spouse the beneficiary and
I don't need to go to probate for that. So
that could be or the size could be you know,
one hundred, two hundred, even three hundred thousand dollars. You know,
(14:08):
if I got to pay that out over five years,
that's not a huge income tax hit, right, you know,
I'm not taking out a ton of money. If I've
got three hundred thousand over five years, that's not going
to blow me into a higher income tax bracket. So
maybe I don't need to wait until I'm seventy three.
I can just set that up right away. So those
(14:28):
are some options. And I think if you're not doing
nursing home planning, certainly we're never going to be doing
a testamentary trust if we're not doing nursing home planning.
But I still might name the estate. I still might
name the trust the beneficiary on a revocable trust, I
would say you would do that primarily only if the
way you're leaving the assets to the spout to the
(14:49):
kids is to protect it from divorces and generation skipping
tax purposes. Otherwise, probably just named the kids. Mister Wutski,
thank you so much for joining us today.
Speaker 3 (14:57):
Always a pleasure.
Speaker 1 (14:59):
This has been Ask Todd on the Financial Exchange Radio network.
Ask Todd with Todd. Lutsky has been presented by Cushing
and Dolan, serving Massachusetts and New England for more than
thirty years, helping families with the state and tax planning,
Medicaid planning, and probate law. Call eight hundred three nine
three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(15:19):
Cushing and Dolan. Armstrong Advisory does not provide any legal
or tax advice. Please consult with your illegal or tax
advisor on such matters. Cushing and Armstrong do not endorse
each other and are not affiliated
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