Trusts as Beneficiaries of Retirement Benefits: Searching for Drafting Solutions
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With respect to several issues created by SECURE and the proposed Treasury regulations on RMDs, there is still great uncertainty about whether there are “general rules” that can be applied when drafting a trust to be named as beneficiary of retirement benefits….ideally, “boilerplate” clauses that work for “everybody.” This webinar explores several of these conundrums, explains what is at stake with the particular concern, examines various proposed solutions, and TRIES to find a recommendation enabling drafters to move forward.
The special topics Natalie plans to cover are:
- “Separate accounts” within a retirement plan when a trust is beneficiary
- What separate accounts mean; not to be confused with “separate shares”
- The IRS rule on subtrusts as beneficiaries of a retirement account
- The special Code rule regarding subtrusts if there is a D/CI beneficiary: The “Type 1 AMBT”
- What difference it makes (or doesn’t make) under various fact patterns
- When you may get a better deal WITHOUT separate accounts!
- So your default position should be…..?
- The “oldest trust beneficiary” doesn’t matter any more…
- Except when it does!
- Conduit trusts: What is a conduit trust, when to use, benefits of, and when you get NO benefit
- The trap in a spray trust for minor child EDBs
- Can anything be done to help the elderly beneficiary?
- Toggling devices to qualify for the ghost life expectancy
- The “last man standing” approach
- How and why it works
- Testing your wipeout provision!
NOTE: Attendees at this webinar are expected to have a general understanding of the post-SECURE RMD rules and the IRS’s proposed RMD regulations issued February 2022 that give rise to the above problems.
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Natalie B. Choate practices law in Boston, Massachusetts, with the firm of Nutter McClennen & Fish LLP. Her practice is limited to consulting on estate planning and retirement benefits matters. Her books Life and Death Planning for Retirement Benefits and The QPRT Manual are leading resources for estate planning professionals.
Miss Choate is a former chairman of the Boston Bar Association Estate Planning Committee, which she founded in 1981, and its ERISA and Employee Benefits Law Committee, from 1990-1992. She is a former Regent of the American College of Trust and Estate Counsel and former Chairman of its Employee Benefits Committee. She is a member and former officer of the Boston Probate and Estate Planning Forum. She was named “Estate Planner of the Year” by the Boston Estate Planning Council, and was one of the first 10 attorneys to receive the “Distinguished Accredited Estate Planner” award from the National Association of Estate Planners and Councils. She is listed in The Best Lawyers in America.
She is an editorial advisor for several professional periodicals: Trusts and Estates, Ed Slott’s IRA Advisor, The Leimberg Information Service Employee Benefits Newsletter and Keeping Current. Her articles have been published in ACTEC Notes, Trusts and Estates and Estate Planning magazine. She is a contributing author and former coeditor of the book Drafting Wills and Trusts in Massachusetts. She authors a monthly column on retirement benefits for MorningstarAdvisor.com.
Miss Choate has taught professional-level courses in estate planning for ALI-ABA (the American Law Institute-American Bar Association), American College of Trust and Estate Counsel, International Association of Financial Planners, MCLE, the Boston and Massachusetts Bar Associations, and other organizations, and has spoken at the Heckerling, Notre Dame, Heart of America, New England, Southern California, Mississippi, Southern Federal, and many other Tax Institutes. She has lectured in 49 states, the District of Columbia, and Puerto Rico. Her comments on estate and retirement planning have been quoted in The Wall Street Journal, Newsweek, Kiplinger’s Personal Finance, Forbes, Financial Planning, USA Today, and Financial World magazines.
A Boston native, she is a graduate of Radcliffe College and Harvard Law School.