Mportant Information About Your Revocable Living Trust (Page 8 of 10) in pdf

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, P.C.

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Your revocable trust might be named as beneficiary, to make sure that the IRAs or retirement

plan benefits will be available, along with other assets, to fund the Family Trust and make full use of your

unified credit (applicable exclusion amount) for estate tax purposes. To designate your revocable trust as

beneficiary, use the following format (but see the discussion in alternative (6) below):

The then acting trustee of the _____________________________ [name of your trust], dated

____________________, as amended.

Your spouse might be named as primary beneficiary, and the Family Trust created under your

revocable trust as first contingent beneficiary. Under this alternative, your spouse can reevaluate the situation at

the time of your death, and either (1) receive the IRA or retirement plan death benefit (and probably make a

spousal rollover), or (2) disclaim all or part of the death benefit, so that it will pass to the Family Trust created

under your revocable living trust, and avoid wasting your unified credit.

Instead of naming your spouse as primary beneficiary, you could name the Marital Trust created

for your spouse’s benefit as beneficiary. Special language must be added to the trust agreement if this

alternative will be used. You may prefer this arrangement if you want to designate the disposition of the benefit

after your spouse’s death. In addition, you may use this alternative if the benefits constitute a large portion of

your estate and the Marital Trust is a “qualified terminable interest property” (QTIP) trust. In that event, the

unified credit or applicable exclusion amount can be used within the QTIP trust by the trustee not electing the

entire trust to qualify for the estate tax marital deduction. To designate the Marital Trust as beneficiary, use the

following format:

The then acting trustee of the Marital Trust created under the ___________________ [name of

your trust], dated _____________________, as amended.

Instead of naming your revocable trust as primary or contingent beneficiary, you may want to

name your adult children individually. To designate your children as beneficiaries (and to provide that a

deceased child’s share will be distributed to his or her children), use the following format:

My descendants, by representation, except that if any descendant is under the age of 18 years, his

or her share shall be distributed to _______________ as custodian under the UTMA for the

benefit of that descendant.

However, if you do not want to make an outright gift of the account or benefits to your

descendants, but still want the income tax deferral from calculating distributions based upon your descendants’

life expectancies, you could designate the trusts created for your descendants under your revocable trust as the

beneficiary. To have your descendants treated as “designated beneficiaries” of the trusts created for their benefit

under your revocable trust, under the IRS regulations, use the following format (and provide the required

information to the plan administrator):

The then acting trustee of the __________________ [name of your trust], dated

_______________, as amended. If the trustee of the __________________ [name of your trust]

Mportant Information About Your Revocable Living Trust Page 8