Retirement accounts like IRAs and 401(k)s are often among the largest assets in an estate. But when it comes to estate planning, they operate under a very different set of rules compared to other types of property. Many Florida residents want to know whether it makes sense to name a trust as the beneficiary of a retirement account — and if so, how to do it correctly. Here's what you need to know.

Can a Retirement Account Be Held in a Trust?

During your lifetime, retirement accounts cannot be retitled into a trust. They must remain in your individual name to maintain their tax-deferred status. However, you can name a trust as the beneficiary of a retirement account, which allows the trust to receive the proceeds after your death and manage how those funds are distributed to your heirs.

Why Use a Trust for a Retirement Account?

Naming a trust as the beneficiary may be a good strategy when:

1. You Want Control Over How Funds Are Distributed

A trust allows you to set rules, such as:

- Delaying distributions until a beneficiary reaches a certain age

- Requiring that funds be used for education or medical needs

- Preventing an irresponsible heir from receiving a lump sum

2. Your Beneficiary Is a Minor, Has Special Needs, or Faces Creditor Issues

Trusts can be designed to provide lifelong protection for vulnerable beneficiaries. For example, a special needs trust may be appropriate for a disabled child, and a spendthrift clause can protect the account from creditors or divorce.

3. You Want to Preserve Some Tax Deferral

Although the rules have changed (see below), trusts can still help beneficiaries avoid immediate taxation, depending on how the trust is structured.

Understanding the 10-Year Rule (Post-SECURE Act)

Since the SECURE Act of 2019, most non-spouse beneficiaries of retirement accounts must withdraw the entire balance within 10 years of the account owner's death. This includes most trusts as beneficiaries.

However, exceptions apply for “eligible designated beneficiaries”, including:

- Surviving spouses

- Minor children (while they are minors)

- Disabled or chronically ill individuals

- Individuals less than 10 years younger than the decedent

For these beneficiaries, distributions may still be stretched over their life expectancy if the trust is set up properly.

Types of Trusts Commonly Used

Conduit Trust

- Acts as a pass-through: the required minimum distributions (RMDs) from the IRA are immediately passed to the beneficiary.

- Offers some protection while still qualifying for favorable tax treatment.

- Cannot retain IRA funds in the trust.

Accumulation Trust

- Can hold onto distributions, offering more control and protection.

- May result in higher taxes if income is retained by the trust.

- Needs to be carefully drafted to remain a “see-through trust” under IRS rules.

Risks of Naming a Trust as Beneficiary

- Tax Rates: Trusts reach the top federal income tax bracket much faster than individuals.

- Complexity: Trusts must meet specific IRS criteria to qualify as a “see-through” trust.

- Legal Drafting Requirements: A poorly drafted trust can trigger immediate taxation or unintended distributions.

Best Practices for Florida Residents

- Get Professional AdviceRetirement accounts are subject to special tax rules that change frequently. A trust must be drafted to comply with both federal tax law and Florida trust law.

- Use Precise Beneficiary DesignationsIt’s not enough to name “my trust” — the full legal name and date of the trust should be listed.

- Coordinate with Your Entire Estate PlanTrusts can be powerful tools, but they must be coordinated with your will, power of attorney, health care directives, and financial institutions.

Conclusion

Trusts can be an effective way to manage and protect retirement account distributions for your loved ones — but they must be used carefully. The decision to name a trust as a beneficiary should never be made without legal guidance. At Bart Scovill, PLC, we help Florida families design estate plans that are clear, protective, and tax-efficient.

If you’re unsure whether a trust should be the beneficiary of your retirement account, contact us today to schedule a consultation.

Disclaimer: This article is for general informational purposes only and does not constitute legal, financial, or tax advice. Reading this content does not create an attorney-client relationship with Bart Scovill, PLC. You should consult with a qualified professional regarding your specific situation before making any decisions related to estate planning or retirement accounts. https://scovills.com/?p=3410

New Estate Planning Video: Myth, Mistake, or Truth: My Trustee Needs Financial Skills

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Attorneys, CPAs, and financial advisors spend their careers protecting the interests of others. Yet many professionals overlook the importance of protecting their own practices. A comprehensive estate plan should do more than manage personal assets—it should also ensure that clients are protected, staff are supported, and the professional’s legacy continues even in the event of incapacity or death.

Why Professional Practices Require Special Planning

Professional practices are governed by strict licensing and ethical rules. In Florida, only licensed professionals may own or operate certain types of firms, and those licenses cannot simply be transferred to a spouse or child. Without proper planning, a practice can be forced to close abruptly, leaving clients unserved and the estate without a way to realize the business’s value.

Key issues commonly include:

- Client obligations: Deadlines, filings, and fiduciary duties continue even after an owner’s death or incapacity.

- Confidentiality: Someone must be authorized to secure and manage client records.

- Compensation: Fees and commissions earned but not collected must be handled properly through the estate.

- Licensing restrictions: Only qualified professionals may manage or wind down the practice.

The Importance of a Successor or Closure Agreement

Every professional should have a written succession or closure plan.For attorneys, this often means designating an Inventory Attorney under Florida Bar Rule 1-3.8(e).For CPAs and financial advisors, it may involve a buy-sell agreement, continuity plan, or successor firm arrangement.

These agreements address essential questions:

- Who will contact and protect clients?

- Who has authority to pay staff and close accounts?

- How will the practice’s value be determined and transferred?

Without these answers, both the estate and clients may face unnecessary disruption and financial loss.

Coordinating the Practice with the Estate Plan

The estate plan and business continuity plan should work together. Steps to consider include:

- Durable Power of Attorney: Authorize a trusted colleague to manage business operations temporarily if needed.

- Revocable Trust: Assign ownership interests to a trust that can contract with a licensed successor or arrange a sale.

- Insurance and Valuation: Maintain funding mechanisms such as key-person or buy-sell coverage to preserve liquidity.

- Client Communication: Prepare a plan for notifying clients and transferring active matters or accounts.

Proper coordination ensures the practice’s financial and professional value is not lost in transition.

Encouraging Cross-Professional Planning

Attorneys, accountants, and financial advisors often share clients who rely on consistent professional guidance. By implementing their own continuity plans, professionals set an example of responsible planning while also protecting mutual clients from unnecessary stress and uncertainty.

Professionals who wish to integrate business succession into their estate plans can benefit from working with an attorney familiar with Florida’s ethical and legal requirements for professional entities.

Disclaimer:This article is provided for general informational purposes only and is not intended as legal, tax, or financial advice. Reading this content does not create an attorney-client relationship. Laws and professional licensing rules vary based on individual circumstances and may change over time. Attorneys, CPAs, financial advisors, and other professionals should consult with qualified legal counsel regarding their specific succession and estate planning needs.

Helpful Links

For Attorneys

- Florida Bar Inventory Attorney Program:https://www.floridabar.org/member/inventory-attorney-program/Explains the Bar’s rules and resources for appointing an inventory attorney under Rule 1-3.8(e).

- Florida Bar Rule 1-3.8(e): Inventory Attorneyshttps://www.floridabar.org/rules/rrtfb/(Scroll to Chapter 1, Rule 1-3.8(e) for the exact rule text.)

- The Law Practice Exchangehttps://www.thelawpracticeexchange.comMarketplace and advisory service for buying, selling, and transitioning law practices.

For CPAs

- Florida Institute of CPAs (FICPA): Practice Continuation & Succession Planninghttps://www.ficpa.org(Search “practice continuation” or “succession” within the site for FICPA’s model agreements and guidance.)

- AICPA: Business Continuation Planning for CPAshttps://us.aicpa.org(Provides national-level templates and checklists for firm continuity.)

For Financial Advisors

- FINRA: Business Continuity Planning Rule (FINRA Rule 4370)https://www.finra.org/rules-guidance/rulebooks/finra-rules/4370Outlines continuity requirements for financial professionals.

- CFP Board: Practice Transition Resourceshttps://www.cfp.net(Resources for certified financial planners managing continuity and client succession.)

General Practice Succession & Continuity

- SBA Business Succession Planning Guide (U.S. Small Business Administration)https://www.sba.gov/business-guide/manage-your-business/transition-plan

- Florida Department of Business & Professional Regulation (DBPR)https://www.myfloridalicense.com(For verifying and transferring professional licenses when ownership changes.) https://scovills.com/?p=3407

New Estate Planning Video: Myth, Mistake, or Truth: I Don’t Need a Living Will Because I Have a DNR

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When someone dies with an ex-spouse still named as the beneficiary on their life insurance policy, families are often shocked by what actually happens. Many assume divorce wipes out the ex-spouse’s rights automatically—but that isn’t always true. In fact, in some situations the ex-spouse still receives the full payout.

Here’s a clear explanation of how this works under Florida law, and what to expect when this situation appears during probate.

Private vs. Employer-Provided Policies: The Key Difference

Before anything else, you must determine what type of policy you’re dealing with. Everything hinges on this.

Private life insurance policies (non-ERISA)

Under Florida Statute § 732.703, if the policy owner divorces after naming their spouse as beneficiary, the law generally treats the ex-spouse as if they predeceased the insured.

Unless one of the following happened:

- The divorce judgment required the ex-spouse to remain beneficiary

- The parties signed an agreement to keep the ex-spouse as beneficiary

- The insured re-designated the ex-spouse after the divorce

If Florida’s statute applies, the insurance company pays the contingent beneficiary.If no contingent is named, the proceeds go to the estate.

Employer-provided or ERISA-governed policies

These follow federal law, not Florida law.And under federal law, the named beneficiary receives the payout—even if they are the ex-spouse.

This is one of the biggest surprises families run into.

Does the Divorce Judgment Mention Life Insurance?

Some marital settlement agreements require one spouse to:

- Maintain life insurance, and/or

- Keep the former spouse as the beneficiary

If the insured later changes the beneficiary, the policy may pay the person currently listed—but the ex-spouse can sue the estate to enforce the agreement. Courts can impose a constructive trust on the proceeds to honor the divorce judgment.

If the divorce judgment contains any language about life insurance, it must be reviewed carefully.

Timeline Matters: Before or After the Divorce

It’s important to determine:

- When the beneficiary designation was made

- Whether the insured updated the designation after the divorce

- Whether the insured remarried

- Whether any backup beneficiaries exist

A fresh designation naming the ex-spouse after the divorce overrides Florida’s revocation statute.

What If You Represent the Ex-Spouse?

Key question:

“Was the policy employer-provided?”

- If ERISA → The ex-spouse likely gets the proceeds.

- If private → The ex may be revoked unless the divorce judgment protects them.

If the divorce required the insured to maintain the ex as beneficiary, they may still have a claim even if not listed.

What If You Represent the New Spouse or Children?

Your first step is the same: determine whether the policy is private or ERISA.

- Private policy → Good chance the ex is voided.

- ERISA policy → The ex is probably still entitled.

- Backup beneficiaries become important if the ex is voided.

- If the proceeds fall into the estate, probate may become more complex.

Conclusion

When an ex-spouse is named as beneficiary on a life insurance policy, Florida law does not give a one-size-fits-all answer. The key questions are:

- Is the policy private or employer-provided?

- Does the divorce judgment address life insurance?

- Was the ex re-designated after the divorce?

If you have questions about a life insurance issue involving a former spouse, or need help navigating how this affects a probate administration, contact Bart Scovill, PLC. We help families throughout Florida understand their rights and obligations during these situations.

Disclaimer:This article is provided for general informational purposes only and is not intended as legal advice. Reading this article does not create an attorney-client relationship. Life insurance beneficiary issues can be highly fact-specific, particularly when divorce, federal law, or prior court orders are involved. You should consult with a qualified attorney regarding your specific situation before taking any action. https://scovills.com/?p=3404

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When it comes to protecting your family and your future, choosing the right estate planning attorney is one of the most important decisions you’ll make. A well-designed estate plan can provide peace of mind, reduce taxes and expenses, and prevent disputes down the road — but only if it’s done correctly. Here’s what to look for when choosing an estate planning attorney in Florida.

1. Look for Experience in Florida Estate Planning

Estate planning laws vary from state to state, and Florida has some unique rules — especially regarding homestead property, elective share, and trust administration. Look for an attorney who focuses on Florida estate planning rather than one who merely offers it as a side service.Ask how long they’ve practiced in this area and whether they routinely prepare wills, trusts, and related documents for Florida residents.

2. Make Sure the Attorney Understands Your Goals

A good estate plan isn’t one-size-fits-all. Your attorney should take time to understand your family dynamics, financial situation, and long-term wishes.During your consultation, notice whether the attorney:

- Listens carefully before offering advice

- Explains options clearly, without legal jargon

- Tailors recommendations to your circumstances

If you feel rushed or confused, keep looking.

3. Ask About Their Process and Fees

Estate planning should be a collaborative and transparent process. Before hiring an attorney, ask about:

- The planning process: How many meetings are involved? Who drafts and reviews the documents?

- Flat fees vs. hourly rates: Many estate planning attorneys offer flat-fee packages that include common documents such as wills, trusts, and powers of attorney.

- Ongoing support: Does the attorney help update your plan after life changes or law updates?

4. Check Communication and Accessibility

You want an attorney who is responsive and approachable. Estate planning often involves sensitive family matters, and you should feel comfortable reaching out with questions.Check how the office handles communication — do they offer phone, email, or text options? Are calls returned promptly? A caring, organized office can make all the difference.

5. Read Reviews and Ask for Referrals

Online reviews and client testimonials can reveal a lot about an attorney’s professionalism and client service. You can also ask trusted friends, financial advisors, or other professionals for referrals.Look for consistent themes — such as clarity, patience, and attention to detail — that signal a trustworthy attorney.

6. Choose Someone You Feel Comfortable With

Estate planning is personal. You’ll be sharing information about your assets, family, and future wishes. The right attorney will make you feel at ease, respected, and confident that your plan reflects your intentions.

Conclusion

A well-chosen estate planning attorney can help you protect your loved ones and avoid unnecessary stress in the future.If you’re ready to start your plan or review an existing one, contact Bart Scovill, PLC for guidance tailored to your family’s needs. Our firm is focused on Florida wills, trusts, and probate and provides friendly, individualized service at fair rates.

Disclaimer:This article is for general informational purposes only and is not intended as legal advice. Reading this article does not create an attorney-client relationship. Estate planning laws vary based on individual circumstances, and you should consult with a qualified Florida attorney regarding your specific situation before taking any action. https://scovills.com/?p=3400