Consider This Before You Put an IRA in a Trust
A plan to transfer assets to an heir smoothly is important, and sometimes using a trust to holds assets and dole out income over time can be savvy. However, a trust can expose your family to a big income-tax bill if it's funded with a traditional IRA, so it's important to know the risks before listing your trust as a beneficiary on your IRA.
A trust is an estate-planning tool that spells out how assets will be handled after you're gone. There are two types of trusts that can be used with a traditional IRA: a conduit trust and a discretionary trust.
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Source: Fool.com