strech an Ira when pass through trust is beneficiary
Ira client died April, 2012. Pass through Trust is beneficiary. 2 children ages 57 and 55 are trust beneficiaries. 2 variable annuity policies with Allianz are involved. Allianz will not allow internal stretch because trust is the benficiary. Allianz will only cut one check payable to the Trust. Attorney who drew up trust says stretch is allowed on a pass through trust. Only limitation may be the oldest age beneficiary must be used. I cannot find a Custodian who will accept a check payable to the Trust and then covert the funds to a stretch for trust beneficiaries. Dollar amount is substantial, approximately $500,000. Please help.
Permalink Submitted by Alan Spross on Wed, 2012-05-23 22:23
Find another custodian that will recognize a look through trust and transfer the IRA to that custodian. But the trustee of the trust must insist that no check be issued to the trust because a non spouse inherited IRA can only be moved by a trustee to trustee transfer. Allianz is large enough to know better than to unnecessarily attempt to derail the benefits of a qualified trust as the trust attorney can attest.
There are requirements for the trust to be qualified for look through treatment and they are listed on p 36 of Pub 590. There is also a notification deadline to the IRA custodian of 10/31 of the year following the year of the IRA owners death.