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Structuring Special Needs Trusts as IRA Beneficiaries: Avoiding Tax Traps in Funding SNTs With Retirement Accounts

Note: CPE credit is not offered on this program

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, October 19, 2022

Recorded event now available

or call 1-800-926-7926

This CLE course will provide estate planners with an advanced guide to drafting and structuring supplemental and special needs trusts (SNTs). The panel will focus on considerations such as setting up trusts to serve as beneficiaries of retirement accounts and drafting language and traps to avoid structuring third-party SNTs and first-party SNTs.

Description

A critical step in establishing an SNT is determining how to fund the trust. Taxpayers may use some assets, including IRAs, to fund an SNT. However, there are some critical issues that estate planners must navigate to ensure that the trust is structured to preserve public benefits and provide for the special needs beneficiary tax-efficiently.

Estate planners also can utilize ABLE accounts in conjunction with or as an alternative to SNTs. In structuring an estate plan to provide for a beneficiary with special needs, counsel must be mindful of contribution and funding rules and the impact of the trust structure on future public benefits.

Listen as the panel provides a detailed and practical guide to structuring SNTs funded by retirement accounts. The panel will discuss properly structuring trust documents to avoid unwanted tax traps, including sample language and beneficiary structures.

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Outline

  1. Evaluating SNT structures (first-party vs. third-party)
  2. Drafting practices for SNTs
  3. Funding the trust
  4. Special considerations when using retirement accounts to fund SNTs
  5. See-through provisions unique to SNTs
  6. Illustrations and sample language

Benefits

The panel will review these and other critical issues:

  • How to structure beneficiary designations
  • Funding options and requirements of IRAs and other retirement accounts
  • Avoiding the "five-year rule"
  • Integrating ABLE accounts with SNTs
  • Pre-trust strategies
  • Impact of the Secure Act and the proposed regulations on inherited IRAs owned by SNTs
  • Impact of pending legislation sometimes called "Secure Act 2.0"

Faculty

Rubin, Benjamin
Benjamin A. (Benji) Rubin, JD, LLM (Tax)
Partner
Rubin Law

Mr. Rubin focuses his practice on providing legal advice for families of individuals with special needs, including...  |  Read More

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