trust is the bene . trustee is the wife.
Wife has come forward and wants to move the assets from the trust as the bene IRA to her own spousal bene IRA. Wife is the trustee. I hear there is a provision that allows spouse as trustee to do that. could you elaborate on that?
Permalink Submitted by Anonymous (not verified) on Wed, 2009-10-28 21:17
This appears to be the classic “pass through” procedure allowed by the IRS in several PLR’s. If the spouse is a bene of the trust, he/she can direct the custodian to move the money to an “assumed IRA” in the name of the spouse. Most custodians will honor such requests, but may have varying paperwork requirements. I think the key point here is that most companies will perform several steps to accomlplish this:
[u]Trust Inherited [/u]to [u]Inherited IRA (Spouse)[/u] (sometimes done internally as to never actually create an Inherited IRA) and [u]60-day rollover to Spouse’s own IRA[/u]. In other words, tax reporting will occur somewhere along the line that the taxpayer will need to explain to the IRS.
Note: 1099R and 5498 will be match because is it done under the person’s SSN – out of Inherited, into Assumed IRA.
pmk
Permalink Submitted by Bruce Steiner on Wed, 2009-10-28 22:54
I wrote an article on this in the October 1997 issue of Estate Planning: http://www.kkwc.com/docs/AR20050125164755.pdf.