Should I put a 401K into a living trust?

Question

I need to know the pros and cons of putting IRA's and 401K's into a trust.

Answer 1

NO NO NO NO- you need to go to Dave Ramsey's website and read what he says about it. I took his Financial Peace University Class, and it really showed me how to invest my 401K the right way. He's amazing!  

Answer 2

This is usually a good idea, depending on the size of the trust.  A trust is just a legal loophole that protects your financial property from probate, and lets you designate who receives your retirement money if you die before then.  

If you have a sizable amount, say, over $100,000, then you should probably meet with an accountant or financial advisor who has specific expertise in this area, but with smaller portions you can do your own homework with some help from the local library or bookstore.

Answer 3

1. You cannot legally take a 401(k) and create another entity around it. A 401(k) is a corporate retirement plan.

You are a plan participant I take it? Then you can invest those funds.

What you can also do is name benificaries to your 401(k).

You should always.

1. name spouse as primary beneficiary (100%).

2. children can be named as subsequent beneficiaries.

3. if you choose not to elect the children, then you can name the Trust as beneficiary but only after naming spouse as primary.

IRAs

IRA's have the same retirement rules like above. Except. You have more control over the IRA.

IRAs

1. name spouse as primary beneficiary (100%).

2. children can be named as subsequent beneficiaries.

3. if you choose not to elect the children, then you can name the Trust as beneficiary but only after naming spouse as primary.

Answer 4

First, impossible.  401k assets are owned by the 401k trust and can't be put into a living trust.  You can name the trust as the beneficiary so long as it satisfies all distribution rules are applicable (joint and survivor and minimum distribution rules).  but remember, the beneficiary already receives the money outside of probate so it's really pointless.   Further, it prvents spousal rollover of benefits which if  you're married is bad tax planning!

Not a good idea!

Answer 5

If this involves hundreds of thousands then you are in the wrong place for advice.  

Answer 6

no...spesify hu inherit it on yer deth.  The trustee or mutual fund kumpanee that handel the 401.

Answer 7

It usually isn't a good idea but you should check with a competent attorney (with a strong tax and elder issues background).