​Question:  I have a sizable IRA and would like to protect it for my wife and kids, from a potential long-term nursing home stay.  I am told it is stuck in my name and I can’t transfer to a trust.  Do I have any options?
Answer:  You are basically correct.  You are the “I” (individual) in the term “IRA” (Individual Retirement Account).  Because IRAs are qualified tax deferral investment vehicles, you cannot transfer them to a trust.  Any attempt to liquidate the IRA will require a significant tax payment.  There are still planning options.
If we accept the fact you are “stuck with your IRA”, perhaps don’t double the risk by leaving it to your wife.  You have an opportunity to redirect your beneficiary designation away from your wife, and protect the IRA funds for your kids – in case your wife needs nursing care.  Note: this scenario assumes you pass away before your wife (this is certainly my plan). 
What is the downside?: Naming your trust as beneficiary may protect the assets but, doing so will end your IRA based tax deferral.   Upon your death, there will be significant taxes paid from your IRA, because unlike individuals, a trust cannot benefit from an IRA.  Consult with your CPA to determine the tax effect of naming your trust as your beneficiary. 
Possible offset to the tax effect:  Instead of naming your trust, you can name your two children to receive the IRA funds in their own names.  This allows them to continue tax deferral for a certain period of time.  However, it also subjects the IRA funds to your kids creditors (ie: death/divorce/taxes, etc).  Because your wife will have no control, you better trust your kids 100%. 
Ultimately, there is a tradeoff to be decided here:  do you prioritize asset protection at the cost of a large tax bill upon your death?  Explore further with a trio of professionals: Financial Advisor, Tax professional, and Attorney.  

​Question:         I am probating my Father’s estate.  I received letters from creditors who I don’t recognize.  I am familiar with his financial history.  I requested proof of the debt and got a list of old expenses.  They may be legit, but I can’t be sure.  How do I handle these? 
 
Answer:           A doubting personal representative of an estate has a few options, when dealing with creditors:
 
• Pay the debt, but risk that your family may object, later – remember, you are the “team captain” but subject to the will of the team (aka: the estate’s heirs or devisees).  Don’t go volunteering the team’s money to pay expenses which may not be legitimate. 
 
•  You can get advance approval from the Probate Court.  Here, you will give the team a chance to dispute.  Otherwise, if they don’t you will be authorized to pay the debt.
 
• You can “compromise the debt” by negotiating a resolution.  This can happen with or without Probate Court oversight. 
 
• Finally, you refuse to pay and defend any lawsuit brought by the creditor.  This lawsuit will likely be in the District or Superior Court, but must happen within a year from the date of death.
 
Use common sense and avoid spending a huge amount of your time, and racking up your personal rep. fees and legal fees.  That creates a double whammy expense for the estate’s beneficiaries.