Trustee for an IRA

Can an Inherited IRA for the benefit of an individual be managed by a Trustee (member of family)?. The person inheriting is a special needs person. A Trust was set up for this purpose but the accountant want to open an Inherited IRA to roll the assets into and then make RMD’s to the Trust.



Several private letter rulings have permitted a beneficiary of an IRA to transfer the inherited IRA into a special needs trust.



It sounds like the IRA owner has passed and named the disabled beneficiary individually as IRA beneficiary. If so, in what order was the creation of the SNT and death of the IRA owner?  If not so, please clarify. Generally, it would have been preferable to partition the IRA and name a qualified SNT trust as the sole beneficiary of that IRA. That would have allowed any IRA funds remaining at the death of the beneficiary to pass to other family members rather than to the Medicaid program. In PLR 2006 20025, an individual beneficiary was allowed to make a non taxable transfer of an inherited IRA into a newly created qualified SNT where RMDs were based on the LE of the disabled SNT beneficiary. However, amounts remaining in the IRA at beneficiary death would go to reimburse Medicaid payments.



The Trust was created prior to the death of the owner.  The 3 siblings are rolling there portion into there own Inherited IRA’s, the remainder goes to the Trust.



What does the beneficiary designation form say as to who gets the IRA?  The person in question or the trust for the benefit of the person in question?



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