Trust beneficiary of IRA — can it look-thru?

Submitted by Stephen Csenge on Tue, 2017-03-07 16:56

Married couple (same sex) one passed away leaving their IRA with the beneficiary to their trust. The surviving spouse is the sole income beneficiary of the trust with a charitable remainder as the final beneficiary. The attorney whom created the trust indicates it is a “look-thru” trust (and it does appear to have such language). The attorney is also the successor trustee. The deceased was age 74; the surviving spouse is in their mid 60’s.

Can the IRA be taken as a stretch-IRA on the surviving spouses life expectance with the RMD’s being paid to the trust and subsequently to the spouse? If so, how would the inherited IRA be titled?

If not any suggestions as how best to take?



Submitted by Bruce Steiner on Tue, 2017-03-07 22:01

  • Is it a conduit trust?  if not, is it a charitable remainder trust?
  • What is “their trust”?
  • You may wish to consult with the attorney handling the IRA owner’s estate, or other competent tax or trusts and estates counsel.


Submitted by Stephen Csenge on Wed, 2017-03-08 15:27

Thanks for the questions; they help clairfy.  the “trust” is/was the decedants Revocable Trust.  The surviing spouse is entitled to 5% annual income from the trust for their lifetime and when they pass any residual goes to a charity.  There are other non-qualified assets that go into the trust. I am dealing with the attorney whom drafted the trust and is the successor trustee.  The trust has a clear clause stating it is a “look-thru” trust for qualified assets…??   However, he has no idea how to title the inherited IRA.  I’m assuming it is similar to when a Specail Needs trust is a beneficiary, but I am not sure either and the custodian (Pershing) is of no help.     



Submitted by Ben Meyer on Wed, 2017-03-08 16:41

Since the trust has a remainder beneficiary that is a charity and not an individual person, it appears that the trust is not qualified as a “look-through” trust within the scope of regulation 1.401(a)(9)-4, Q&A-5(b).  Statements contained in the trust document itself would not be effective in making the trust a qualified “look-through” trust if they are in conflict with the IRC and regulations.  If the trust is not a qualified trust, the RMD would be determined by the remaining life of the decedent instead of the life of the surviving spouse, since the decedent passed after reaching the required beginning date (RBD).  A distribution of a greater amount may be taken in order to satisfy the trust requirement ro distribute 5% annually.



Submitted by Bruce Steiner on Wed, 2017-03-08 17:09

  • It sounds like a charitable remainder trust (CRT).  CRTs are exempt from income tax.  If it’s a CRT, it can take the entire IRA all at once without current income tax.  
  • If the attorney isn’t familiar with this, you may wish to consult with a different attorney, who should be able to properly advise you as to what it is and as to how to proceed.
  • Bruce Steiner, attorney, NYC, also admitted in NJ and FL


Submitted by Stephen Csenge on Wed, 2017-03-08 19:41

Thank you for the clarification.  How does the inherited IRA get tiltled to remain under the life expectance of the decedent and paying RMD’s to the trust?  Or would the RMD need to go directly to the beneficiary?      



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