The IRA Trust.(Individual retirement accounts)

Many CPAs find that clients have accumulated considerable retirement assets. One tax-effective way to provide for a method of passing these assets on to grandchildren is to use an "IRA Trust." This is a dedicated trust used to receive assets from an IRA account for the benefit of a particular beneficiary.

Consider a client, Jack, age 75, who in 2005 establishes an IRA Trust for the benefit of Mary, his 12-year-old granddaughter. If Jack dies in 2010 at age 80, the trust may receive required minimum distributions from Jack's IRA for a term of 65 years, based on Mary's age in the year after the year of Jack's death.

In order for the trustee to use Mary's life …