09/02/2026
"Should I remove my trust as my IRA beneficiary because trusts reach the 37% tax bracket so quickly?"
Not based on that number alone.
If your plan uses an accumulation trust, the trustee may be able to keep IRA withdrawals inside the trust. That can create a higher income-tax cost, but it may also keep the inheritance protected during a divorce, lawsuit, addiction crisis, or period when your child isn't ready to manage it. If your plan uses a conduit trust, withdrawals generally pass through to your beneficiary, which may shift that taxable income onto their individual return but puts the money directly into their hands. Neither structure wins for every family — it depends on your beneficiary, the terms of your trust, and what you want the money to make possible.
Here's the part that catches people off guard while they're weighing that decision: your will may not control your IRA at all. The beneficiary form you filled out years ago probably does. That form may still name a former spouse, a child outright, or a trust that was later amended or replaced — someone selected before the SECURE Act changed the rules. Your retirement account generally passes according to that form, regardless of what your will says.
So you can have an excellent plan sitting in a binder while one old form directs one of your largest assets somewhere else. Beneficiary designations aren't a separate administrative task. They're part of your Life & Legacy Plan® and need to be reviewed beside your trust, your family circumstances, and current law.
If your estate plan predates 2020, or your IRA has grown since that form was last reviewed, this is worth a look.
