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Standalone Retirement Trust: What is it? And Why Should I Consider One?

Standalone Retirement Trust. Retirement accounts like IRAs and 401ks are protected from your creditors during your life. However, when you pass the account to your children and grandchildren the protection disappears. Until recently, people didn’t use trusts with retirement accounts because it meant that there would be a substantial tax bill. The IRS has changed the rule and now you can structure the allocation and distribution of the money to your children and grandchildren.

So how do we add creditor protection and control to your retirement accounts? By using a Standalone Retirement Trust (SRT).

Standalone Retirement Trust

Elder Law

What are some of the reasons you should consider a standalone retirement trust.

  1. You and your spouse have substantial retirement plans. Spouses can shield creditors from inherited IRAs and other retirement accounts. Additionally, you can pass them to your children and allow them to receive the same creditors protection benefits.

 

  1. You have concerns about the spending habits of your beneficiaries. If your children and grandchildren are not as frugal as you would like, you should consider an SRT as they allow control and instruction on how much they receive – and when.

 

  1. You are concerned about lawsuits, divorce, or other possible legal actions. If your beneficiary is part of a lawsuit, is about to divorce, file for bankruptcy, or is involved in any type of legal action, an SRT can protect the assets they inherit from those creditors.

 

  1. You are remarried with children from a previous marriage. A standalone retirement account allows you to provide for your spouse and then still provide for your children in a blended family. Without the trust you cannot guarantee that your spouse will leave it to your children or you have to chose to not leave money for your spouse. Likely, neither of these sounds like a good option.

 

You’ve Worked Hard To Protect & Grow Your Wealth – Let’s Keep It That Way

You have spent your life saving money to put into those retirement accounts and your beneficiaries’ creditors shouldn’t be able take it from them. Dafoe Law, PLLC can help you create beneficiary creditor protection and allow you to continue to control the time and nature of the distributions.

Dafoe Law, PLLC is a Life Care Planning law firm serving the Estate Planning, long-term care, probate, and trust administration needs of clients in Saginaw, Bay, Genesee, Huron and Tuscola Counties. Dafoe Law serves Frankenmuth, Bridgeport, Birch Run, Reese, Millington, Clio, Vassar, Saginaw, Saginaw Township, Freeland, Thomas Township, Spaulding Township, Burt, Bay City, Essexville, Munger, Kochville Township, Caro, Cass City, Sebewaing, Unionville, Pigeon, Bad Axe. Travis I. Dafoe is a member of the National Academy of Elder Law Attorney and WealthCounsel. Dafoe Law, PLLC is also a member of the Life Care Planning Law Firm Association. Start estate plan

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Travis Dafoe Elder Law Attorney