Naming a trust as IRA beneficiary may protect your IRA from creditors, long after your death, if proper language is used. If the trust doesn’t permit debts of the decedent to be paid, the beneficiary probably will enjoy creditor protection. The same likely will be true if the trust is silent on this issue.
In fact, a trustee who pays debts of the decedent from an IRA when not specifically instructed to do so may be charged with a breach of fiduciary duties and incur liability for those acts.
However, if the trust says that “debts of the decedent shall be paid,” you probably would destroy the creditor-proof status of the IRA. Your beneficiaries would not enjoy asset protection, even in states where IRAs normally are protected.
