Whether you are establishing a brand-new estate plan in Florida or revising an existing one, you should give some thought as to how best to handle your retirement account funds. These assets are not generally covered by a standard will as explained by Forbes. This is because you will have identified a beneficiary for these accounts, just as you would have done with a life insurance policy. That, however, does not mean you cannot or should not consider putting them under the watchful eyes of a trust.
While it may not be necessary to include 401(K), Roth Individual Retirement Accounts, or other retirement funds in a trust in all cases, there are some scenarios which make this an idea worth considering. One of these is when your heir is a minor or even simply a rather young legal adult. The thought of an 18-year-old all of a sudden being given a large sum of money can conjure up legitimate concerns about fiscal responsibility and maturity.
A trust can also provide protection against creditors. For example, if an heir is forced to file for bankruptcy, the retirement funds may be able to be saved. A trust can also allow a person to take distributions over a longer period of time, allowing the opportunity for the fund value to grow even more in a tax-free state.
If you should choose to incorporate a 401(K) or other such fund into a trust, you will need to update the account beneficiary to be the trust. This information is not intended to provide legal advice but general information about listing a trust as the beneficiary for retirement accounts in Florida.