Photo by Denys Kostyuchenko on Unsplash

Question:

I have a living trust done in the State of West Virginia back in 1994. I moved to Florida in 2023. The trust was reviewed and amended by attorney in 2016.

Q1. How do I update the trust to comply with the state of Florida; do I need affidavit of address change documented on paper and notarized to be filed in the living trust?

Q2. Do I need to transfer my IRA and retirement plans to the living trust?

Response:

There’s no need to change the trust now that you live in Florida. The trust if valid under West Virginia law is valid nationwide. You might, however, want to have it reviewed by a Florida estate planning lawyer just to make sure there aren’t state specific laws that would make it advisable to amend it in some way.

You cannot transfer IRAs or retirement plans to the trust. You can name the trust as beneficiary for any funds or benefits that may remain upon your death. But that can get a bit complicated with IRAs and 401(k) plans. Most individual beneficiaries have 10 years after the owner’s death to withdraw the funds, with some beneficiaries such as spouses being able to stretch the withdrawals out over their lifetimes. Most trusts must withdraw the funds — and thus pay the taxes — within five years. The exception is if the trust is written in such a way — often referred to as a “see-through” trust — that the IRA is deemed to be paid to the trust beneficiary rather than to the trust itself.

If you would like to have your retirement plans held in trust for the beneficiary or beneficiaries after your death, I would recommend that you consult with an estate planning attorney who can advise you on whether the trust needs to be revised to qualify as “see through.” You might also decide that it’s not worth the trouble and the five-year withdrawal requirement is fine.

Related Articles

Should You Remarry? How Will Irrevocable Trust Be Taxed Upon My Death? How Can Daughter Protect Her Inheritance Without a Prenuptial Agreement?