Los Angeles, CA asked in Estate Planning for California

Q: Four Morgan Stanley IRA accounts are listed in schedule "A", in a Trust.

Four Morgan Stanley IRA accounts are listed in schedule "A", in a Trust. Those accounts are still at Morgan

Stanley, but I noticed that the account numbers listed today, are different from when the Trust was

established in 2005. Is this a problem? If Morgan Stanley can paper trail these current account numbers back

to the originals, would that rectify any potential problem?

Thank you,

E

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1 Lawyer Answer
Jeffrey Louis Gaffney
Jeffrey Louis Gaffney
PREMIUM
Answered
  • Estate Planning Lawyer
  • Carlsbad, CA
  • Licensed in California

A: That depends ...

First of all, you almost never want IRAs or 401Ks in a Trust. Those sorts of retirement plans have named beneficiaries so that the money automatically goes to the beneficiary upon the death of the owner. Having the IRAs in a Trust serves no purpose.

You could have a Trust as the beneficiary of an IRA but that would normally be a bad idea because the Trust has a much higher tax rate than people do, after about $13,000 of annual income. You could do it for a Trust that will have a great deal of deductible expenses, but that is rare.

The exact listing of Schedule A of a Trust is not all powerful. It is far more important that the bank or brokerage house registration of the account is in the name of the Trust. You may also find language in the Trust that indicates that "everything I own belongs to my Trust" or a Pour Over Will that tries to do the same thing; many times the courts will honor that intent of the grantor/testator.

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