Consider carefully before making your trust the beneficiary of your IRA.
For tax purposes, it is not always a good idea to designate a trust as the beneficiary of your IRA, according to the Financial Advisor in “Is Naming A Trust As Beneficiary Of A Client’s IRA A Good Idea?”
The biggest and most important issue is that IRA beneficiaries must take required minimum distributions or face tax consequences. This requirement does not go away when the beneficiary is a trust and not an individual.
Satisfying the requirement with a trust can get technical.
Every beneficiary of the trust must be identifiable and must be an individual. While that might seem easy to accomplish, it is not always the case. Every successive beneficiary must be an identifiable individual. Therefore, the beneficiaries who would automatically receive the trust assets when a previous beneficiary passes away, must be an identifiable individual.
This can be an issue, if a residual clause in the trust includes giving assets to a charity, for example.
That is not the only complication with designating a trust as the beneficiary of an IRA.
An estate planner can guide you in creating a trust that fits your unique circumstances.
Reference: Financial Advisor (Dec. 2, 2016) “Is Naming A Trust As Beneficiary Of A Client’s IRA A Good Idea?“