Funding your Trust: Retirement Accounts

After your Trust is signed, you must take steps to fund it with your Trust Property.  If you do not fund the Trust with your Trust Property, the Trust may not be effective, and your estate may have to go through probate upon your death.

Like life insurance policies, you can simply change the beneficiary designation of your retirement account(s) to the Trust.  Whether your Trust should be the primary or secondary beneficiary depends upon your situation and tax laws.  Consult your accountant or financial advisor before naming your Trust as the beneficiary of your retirement account.

Make sure you do not retitle any qualified retirement accounts (IRAs, 401(k)s, 403(b)s, or qualified annuities) because that may constitute withdrawal and subject the account to income tax and maybe penalties.  Again, consult your accountant or financial advisor before naming your Trust the beneficiary of your retirement account.