How to Transfer a Roth IRA to a Living Trust

by Ron White

A Roth IRA is meant to provide you with steady income after retirement, but you also need to plan ahead in case you pass away before you receive your full IRA benefits. One important task is naming a beneficiary, and you have the option of naming a living trust as your beneficiary. Unless you have legal training, you'll need to consult with an attorney and work with the firm that manages your Roth IRA account to complete the process. Although it may sound complicated, the entire process involves only a few basic steps.

Establish your living trust. A family law attorney can assist you in creating a living trust. You will name the trust and list the trustees in this document.

Contact your Roth IRA trust administrator and ask for the paperwork allowing you to change or designate beneficiaries to your IRA. The form often is called a beneficiary designation form. Alternately, you may be able to manage your beneficiaries through the administrator's website. Fidelity, T. Rowe Price and Vanguard offer clients the ability to manage Roth IRAs online.

Remove the beneficiaries currently listed on your Roth IRA. The beneficiary designation form includes a section where you can list the names, addresses and Social Security numbers of these individuals. The form allows you to specify whether the individuals are being removed or added.

Add the name of your living trust as the beneficiary of your Roth IRA. Some forms include a special section where you can designate a trust as a beneficiary. Be sure that you complete the appropriate section.

Sign and date the beneficiary designation form and return it to the administrator of your Roth IRA by mailing it to the address provided with the form.

Tip

  • Keep a copy of your trust documents handy for reference. You must be sure you provide the exact name of your trust.

Warnings

  • In some states, your spouse must sign a waiver surrendering the right as a beneficiary under the surviving spouse rule for the Roth IRA.
  • Roth IRA assets are taxable as part of your estate when the funds are distributed to the beneficiaries.

About the Author

Based in Central Florida, Ron White has worked as professional journalist since 2001. He specializes in sports and business. White started his career as a sportswriter and later worked as associate editor for Maintenance Sales News and as the assistant editor for "The Observer," a daily newspaper based in New Smyrna Beach, Fla. White has written more than 2,000 news and sports stories for newspapers and websites. He holds a Bachelor of Arts degree in journalism from Eastern Illinois University.

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