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Using a trust to achieve maximized benefits for heirs

New York residents may find that their retirement benefits provide the greatest amount of wealth that can be left to their heirs after they die. However, taxes and other issues can erode the value of such accounts, especially if any errors are made in the withdrawal of funds. Over time, there have been efforts to stretch out the benefits received by heirs, which can allow for a significant increase in the long-term value of such assets. Still, heading off potential losses may be a concern of people who are leaving those assets to their children or other heirs.

By creating a retirement trust, an individual can name the trust as the beneficiary for retirement accounts such as an IRA. When this type of trust is correctly formed and funded, the assets in question can be shielded from adverse life situations involving one's heirs. For example, a blended family could create challenges in leaving one's assets to individuals with whom there are strained relationships. A beneficiary who lacks good money handling skills could waste an inheritance. If one's heir goes through a divorce, a large portion of an inherited retirement account could be lost in a settlement with a former spouse.

By structuring a retirement trust to receive one's remaining retirement accounts, professional handling of account withdrawals can head off costly mistakes. Meanwhile, funds can be dispersed according to one's wishes to the heirs indicated.

During an estate planning meeting with a lawyer, a discussion could be had about the different types of trusts based on the client's financial holdings and long-term goals. A lawyer may provide options for structuring trusts to provide disbursements based on the achievement by the beneficiary of certain milestones, for example.

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