Financial Briefs

Do you own a large IRA and live in a state with an income tax? Consider setting up a non-grantor trust in a state with no income tax. While this financial planning tactic may sound exotic, it's common sense and can make a material difference in your life and beyond.

Placing the IRA in a non-grantor trust in a state with no income tax avoids state income taxes. That's big! In addition, beneficiaries of your IRA would also benefit. Your spouse, children and other IRA beneficiaries could expect to get more from your largesse after you're gone.

According to Financial Advisor News Service, which we are licensed to distribute, naming your IRA beneficiary a non-grantor trust in a state with no income tax may allow your beneficiaries to avoid paying state income tax on the distributions from the IRA.