Are You (or Have You) Drafted IRA Trusts? You Better Make Sure You Do THIS!

By Kristina Schneider, Practice-Building & Marketing Specialist

As you may be aware, the SECURE Act threated to reduce the IRA beneficiary stretchout from life expectancy to only 10 years. However, after passing through the House in late May, it has yet to make its way through the Senate. It’s still unclear if and when it may get passed and now into December, it doesn’t seem likely to pass sometime this year.

If you have been and/or are drafting standalone IRA Beneficiary Trusts (or IRA Inheritance Trusts®) for your clients, you may nevertheless have these or other law changes in the future.

However, as with most things, you cannot simply wait around for laws to pass or not pass to decide what’s best or right for your clients. You’ll still draft IRA Trusts. Plus, while we wait for the government to figure out what’s going on with the SECURE Act, more and more attorney-clients of ours here at The Ultimate Estate Planner, Inc. have had clients they’ve drafted IRA Beneficiary Trusts for begin to pass away. For most of these estate planners, this is the first time they have had to administer these kinds of trusts and they’re charting unfamiliar territory. In fact, beneficiary trust administration problems are occurring.

Make Sure You Check (and DOUBLE Check!) That BDF

One major issue that some attorneys are facing with IRA Trusts is the coordination with IRA custodians and the acceptance of the beneficiary designation form. Having a BDF on file with the custodian that does not properly name the subshare trusts as beneficiaries may effective render the IRA Trust you put together for your client less useful as far as its income tax stretchout benefit and may even violate the intended distribution. This is why it is absolutely imperative that, if you’re drafting IRA Trusts for your clients, you take some extra care to help ensure that the planning you’ve done for them is reflected properly on the BDF and not have it blow up over something as simple as not having the proper BDF recorded and filed by the custodian.

Estate planning attorney, Peter Keon, a senior associate at the Law Firm of Kavesh, Minor & Otis, recommends that clients receive written correspondence from the IRA custodian (on the institution’s letterhead), confirming the acceptance of the BDF and verification that the BDF was, in fact, filed properly. By doing this, it has helped eliminate any BDF hiccups during the administration.

Helpful Training on Post-Death Administration of IRA Trusts

Whether you have had a client with an IRA Trust pass away or not, I highly recommend you check out our On-Demand Program entitled, “Proper Post-Death Administration of IRA Beneficiary Trusts”. During this 90-minute program presented by our President and IRA Inheritance Trust® creator, Phil Kavesh, he walks you through key deadlines and important steps necessary while administering these kinds of trusts. Included in the presentation is also a Post-Death Implementation Checklist that you can use to help you administer IRA Trusts. Some of the feedback we’ve received on this program is that even if you haven’t yet had to administer an IRA Trust, understanding the steps involved for the post-death administration helps you better understand the decisions and planning options made while drafting IRA Trust plans with clients.

Things You Can Do RIGHT NOW!

If you have drafted IRA Trusts for your clients over the last few years, we recommend reaching out to them and bringing them in for a review. Not only would it be a great time to review their overall estate planning, but you can use this as an opportunity to review their BDF on file with their custodian and ensure that what they have on file is done properly. Additionally, this meeting with your existing clients is the perfect opportunity for generating client referrals, private seminars for groups, clubs or organizations that they may be a part of, and updating important information on your clients (including gathering e-mail addresses!).


Kristina Schneider is the Executive Director of The Ultimate Estate Planner, Inc.  She graduated with a Bachelor’s Degree in Business Administration from Pepperdine University in 2004 and was hired right out of college to work for the Law Firm of Kavesh, Minor & Otis, coordinating and facilitating Philip Kavesh’s “Missing Link” Boot Camps while also providing administrative support to Mr. Kavesh as his Executive Assistant for over seven years.  Through her direct hands-on experience in Mr. Kavesh’s law firm, Kristina has been able to assist numerous estate planning professionals through The Ultimate Estate Planner and, equally as important, many of their staff members, in the successful implementation of Ultimate Estate Planner’s products and systems. Kristina has helped numerous estate planning attorneys with seminar marketing and practice management.  You can reach Kristina at (424) 247-9495 or by e-mail at

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