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Decanting Trusts to Remove Unwanted BeneficiariesDecanting Trusts to Remove Unwanted Beneficiaries

Keep assets in the individual retirement account for as long as possible.

Bruce D. Steiner, Attorney

May 16, 2019

13 Min Read
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It’s generally beneficial to keep assets in individual retirement accounts for as long as possible because IRAs provide significant tax benefits. But, if IRA benefits are payable to a trust, and all of the beneficiaries and permissible appointees of the trust are individuals, the one with the shortest life expectancy (that is, the oldest one) is the designated beneficiary for purposes of determining the applicable distribution period (that is, the required distributions).1 This will end up depleting assets from the IRA sooner. To avoid this result, it pays to remove unwanted beneficiaries from the trust. There are several ways to do this, including decanting the trust.

Benefits of IRAs

Qualified plans and IRAs provide significant income ta...

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About the Author

Bruce D. Steiner

Attorney, Kleinberg, Kaplan, Wolff & Cohen P.C.

Bruce Steiner has over 35 years of experience in the areas of taxation, estate planning, business succession planning and estate and trust administration. He is a frequent lecturer at continuing education programs for bar associations, CPAs and other professionals. He is a commentator for Leimberg Information Services, Inc., is a member of the editorial advisory board of Trusts & Estates, is a technical advisor for Ed Slott’s IRA Advisor, and has written numerous articles for Estate Planning, BNA Tax Management’s Estates, Gifts & Trusts Journal, Trusts & Estates, the Journal of Taxation, Probate & Property, TAXES, the CPA Journal, the CLU Journal and other professional journals. Bruce has been quoted in various publications including Forbes, The New York Times, Wall Street Journal, Daily Tax Report, Lawyers Weekly, Bloomberg’s Wealth Manager, Financial Planning, Kiplinger’s Retirement Report, Newsday, the New York Post, the Naples Daily News, Individual Investor, TheStreet.com, and Dow Jones (formerly CBS) Market Watch. Bruce has served on the professional advisory boards of several major charitable organizations and was named a New York Super Lawyer in 2010, 2011 and 2012.

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