Should I put my IRA into my Trust?

One of my clients inquired about his IRA:  Do I put the IRA in the Trust like my other investments?

Not a good idea.

Money in your IRA isn’t taxed while it stays in an IRA account. Under Internal Revenue Service rules, only an individual can own an IRA.  Since trusts, are created and exist to own things on behalf of a beneficiary, all of those things, owned by the trust are taxable.

If you move your IRA into a trust it is considered a taxable distribution to the Trust.  That means all of the money in the IRA is immediately taxable as ordinary income.  Moreover, the tax deferred status of any future earnings is lost.

So he decided to name his trust as the beneficiary of his IRA thus bearing none of the unfavorable tax implications.  The trust has to make required minimum distributions from the IRA, and those are taxable to the same extent as they would be whether there was a trust or not.

Don’t be scammed and pay someone upfront to:

…..fix your credit or dispute incorrect charges or claims.

I am asked frequently by friends and family about people, unknown to them, who contact them and offer to get their money back from a scammer, or fix their credit. These offers come by the way of unsolicited phone calls or the US Post. They will ask for a check or credit card up front for the work they promise to do for you.

Don’t fall for this!!

They often take your money and then do nothing more than you can do – so don’t pay upfront money to anyone who claims they can clean up your credit or dispute incorrect charges with your credit card companies, FOR NO MONEY AT ALL.

The Consumer Finance Bureau just published an online article today and issued the following warning signs:

  • Upfront fees to recover money — don’t pay for any part of a service that has not been performed. You have the right to refuse service and verify the legitimacy of any organization.
  • Claims of insider information and connections –— Submitting complaints to federal agencies, such as the CFPB or the Federal Trade Commission, or state attorneys general offices are free to the public and easy to use. Private companies do not have special access to these free consumer complaint resources.
  • Requests for secrecy — never allow anyone to discourage you from seeking information, support, and advice from family members, friends, or trusted advisers before making a financial transaction.If scammed, report it promptly to your local law enforcement office, and submit a complaint to the Federal Trade Commission at ftccomplaintassistant.gov.

If you have an issue with a financial product or service, you can submit a complaint to the Consumer Finance Protection Bureau at consumerfinance.gov/complaint.

You can also download a printer-friendly version of what the Consumer Finance Protection Bureau published today to share with friends, family.