Trust Inherited IRA to new Trust Bene Inherited IRA?
All… I read a lot on here about when a person names a trust as a bene of an IRA, person dies, then for various reasons, the IRA assets — instead of being put in to an inherited IRA in the name of the trust, are put in to individual inherited IRAs in the names of trust beneficiaries.
What I wasn’t able to find in searching the forum is this scenario:
– IRA account holder John Doe names trust as IRA bene.
– IRA account holder dies.
– IRA assets are transferred into inherited IRA registered to trust (i.e., John Doe Marital Trust Inherited IRA). (Not treated as full disbursement)
– RMDs are taken (surviving spouse is bene).
– Surviving spouse dies.
Can the assets that are currently sitting in the inherited IRA registered to the trust then be moved to inherited IRAs in the names of the next individual trust benes (children), or is that considered some type of disallowed inherited IRA rollover.
Key point… assets were taken out of decedent’s IRA and moved to a completely new account (inherited IRA in name of trust). Not just a case of changing name of bene on decedent’s original IRA and keeping it going that way. (Hope that made sense.)
Any insights would be appreciated, especially if you can point me to any PLRs or reference sources. Thank you!
J
Permalink Submitted by Bruce Steiner on Fri, 2014-01-03 02:23
Yes, but the required distributions continue on the same schedule. If you leave an IRA to a marital trust, you’re giving up substantial income tax benefits in exchange for the ability to control the principal. For more on this, see my article on trusts as beneficiaries of retirement benefits in the March 2004 issue of BNA Tax Management’s Estates, Gifts & Trusts Journal: http://www.kkwc.com/docs/AR20041209132954.pdf.
Permalink Submitted by Donna Messinger on Thu, 2018-05-24 16:47
that link didnt work
Permalink Submitted by Ben Meyer on Thu, 2018-05-24 21:51
Try this link: https://www.kkwc.com/wp-content/uploads/2015/04/AR20041209132954.pdf
Permalink Submitted by Donna Messinger on Thu, 2018-05-24 22:14
Bingo, Thank you. I assume the laws are still the same
Permalink Submitted by Donna Messinger on Thu, 2018-05-24 22:16
One more thing please. I have a question out here on the board. Other than my checking occasionally to see if it was answered, how will I know that it was answered. I remember years ago, I would get an e-mail when it got answered. Thank you