Retirement planning and estate planning often conflict with each other. Often times, a recommended retirement plan has adverse estate tax consequences. In fact, until recently, it was not clear if and how a revocable living trust could be named as the beneficiary of an IRA or 401(k). The IRS, in a series of rulings and regulations, has provided certain guidance in this area. In fact, in Rev. Rul. 2000-2, the IRS has articulated that a qualified terminable interest property, or QTIP, election could be made for IRA benefits payable to a decedent’s trust.
Given the importance of making proper beneficiary designations for retirement accounts, from both an income tax and estate tax perspective, we will be preparing a detailed discussion of this issue and posting the same on our website, TamkinHochberg.com.