Should You Put Your “Trust” in IRA Trusts?

IRA Trusts Millman Law Group

IRA trusts have a lot of benefits

Are you someone who has a significant amount of assets in your IRA? If so, you can benefit from this discussion on IRA trusts. Today we’ll discuss the benefits associated with IRA trusts and how they make a world of difference for your beneficiaries. It’s always beneficial to prepare for the future and think ten steps ahead.  

IRA Trusts Provide Asset Protection to Your Beneficiaries

In general, IRAs have protection from creditors’ claims while the IRA account owner is still alive. However, once the account owner passes on, the IRA assets will lose their protected status in most states. For this reason, the account owner needs to set up a sub-trust and designate a beneficiary to manage the account. Doing so protects the trust and its beneficiary from creditors and timely and costly lawsuits. 

Divorce is another thing to consider. If a divorce happens, only the trustee can distribute the funds under their discretion. If the beneficiary gets married and divorce, files for bankruptcy, or, unfortunately, gets sued, the IRA assets will remain intact if you set up an IRA trust. An IRA trust can only discourage and inhibit poor or excessive spending choices. You can also convert an IRA Trust into a Special Needs Trust so that the beneficiary will still be eligible for government assistance. 

An IRA Trust Puts You in Control 

So, you may be thinking, “Can’t I just leave my IRA in the hands of a beneficiary without a trust?”. You can. But here’s the drawback to that. Your beneficiary can cash out your IRA and spend the money however they’d like! Suppose you name a child or grandchild under the age of 18 as your beneficiary. In that case, a guardianship or conservatorship needs establishment until the child turns 18, and then they can withdraw 100% of the assets. Naturally, you should pick a beneficiary that you can trust. But to minimize any potential issues, an IRA trust puts you in control and ensures your legacy’s longevity. 

IRA Trusts Benefit Blended Families

If you have married twice or more and have a blended family, an IRA trust can make things less complicated. You can give a trustee access to your IRA account to benefit your spouse during their lifetime. You can designate beneficiaries to take over the account when your spouse passes. An IRA trust ensures that your assets go into the right hands. 

If you need more clarification about IRA trusts or are considering one, reach out to Millman Law Group PLLC today. 


Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.