Education Center

Retirement Trust Portfolio


Individual Retirement Accounts (IRAs) have become the primary tool for many people to manage their individual wealth. Because of the amount of money put into these accounts and their financial impact in people’s lives, controlling and protecting these accounts is more important than ever. One way to manage an IRA is by establishing a Standalone Retirement Trust (SRT) as the designated beneficiary for traditional or Roth IRAs.

There are two main advantages to establishing a Standalone Retirement Trust:
● the trust will alert beneficiaries to the fact that the IRAs need special treatment and
shouldn’t be cashed out immediately as there may be significant adverse tax consequences; and,
● an SRT allows “maximum stretch” for Required Minimum Distributions (RMDs) of income following the death of the owner. “Maximum stretch” means the beneficiary of the funds can pay the income tax over a longer period of time, rather than immediately upon the death of the owner. This allows the principal to grow and lessens the immediate tax burden.

If you have an IRA in excess of $1 million establishing a standalone retirement trust to be the beneficiary of your IRA may be appropriate.