Sudoku
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OptionNo. 3 Create a retirement trust, and name the separate trust shares created under that retirement trust as the beneficiary of the retirement accounts. The primary advantages of this option are that the beneficiary (or beneficiaries) can receive asset protection , like the living trust, and that the withdrawal period is 10 years, not 5 years. The retirement trust then creates separate trust shares for the children, grandchildren, or whoever you choose as the beneficiaries. In fact, the beneficiaries of the retirement trust can receive the distributions just as they could if they were named as the direct beneficiaries (over a 10-year period), but they can also receive asset protection through the retirement trust. No restrictions need to be placed on the beneficiaries. The retirement trust is a completely separate document from the living trust and is specifically designed to deal with retirement accounts. Naming a retirement trust as the beneficiary is also advantageous when you are uncomfortable giving the beneficiary of your retirement accounts the authority to withdraw the funds from the retirement account (either because the beneficiary is too young or too anxious). In the retirement trust, you can appoint a trustee to control the withdrawals from the retirement accounts. The terms of the retirement trust can, for example, specify that the trustee will distribute the proceeds outright to the beneficiary or hold the proceeds in accordance with your directions as specified in the retirement trust. Whether you choose to let your beneficiaries be in charge of their shares of the retirement trust or choose a more restricted option, the retirement trust provides the same benefits of postponing the distribution from the retirement account up to 10 years and prevents the “overanxious” child or grandchild (or even the creditor of the beneficiary) from prematurely withdrawing the funds, thereby triggering an unnecessary, premature income tax. Either way, the funds are better protected. Another situation in which you might consider using a retirement trust is if you are married and have children from a prior relationship. If you name your spouse as the primary beneficiary there might be some concern that after you die your surviving spouse will name a new set of beneficiaries different than your intended contingent beneficiaries. To alleviate this problem, you can name the retirement trust as the beneficiary, with your spouse listed as the primary beneficiary of the retirement trust. When your spouse dies, the retirement trust designates your contingent beneficiaries. This will prevent your spouse from changing the contingent beneficiaries. The only drawback of this arrangement is that your surviving spouse cannot use the spousal “rollover” option; the funds must be withdrawn over 10 years. If you choose to use a retirement trust for your retirement account(s), a retirement trust must be created if you don’t already have one. In addition, our office should prepare the necessary paperwork designating the retirement trust as the beneficiary. Do not change the beneficiary until you have first consulted with our office. If you are interested in establishing a retirement trust as the beneficiary of one or more retirement accounts or if you have questions about properly designating the retirement trust as the beneficiary, contact our office. Please be aware that the rules governing the retirement trust are complicated and should not be attempted by you without advice and assistance from an attorney in our office.
Solution on Pg. 4
Inspired by MyRecipes.com
EasyMarch Madness Chili
Ingredients
• • • • • • •
2 lbs ground beef 2 tbsp chili powder
1 tbsp Creole seasoning
1 tsp ground cumin
2 16-oz cans diced tomatoes 2 16-oz cans small red beans 2 8-oz cans tomato sauce
Directions
1. In a deep pot, brown the beef, stirring often. 2. Once beef is cooked, add chili powder, Creole seasoning, and cumin, cooking for 1 minute. 3. Stir in diced tomatoes, beans, and tomato sauce and bring the mixture to a boil. 4. After the mixture boils, reduce the heat to low and let chili simmer for 15 minutes. 5. Serve with toppings of choice, like cheese, sour cream, or chives.
–John Preston
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