Folks,

Thank you for past help in sorting out my situation. I do have one follow-up question:

What type of trust might allow an IRA to be split into marital and family components (the family component soaking up a restrictive $1 million dollar estate exemption, the marital component soaking up the rest, maybe an estimated $3.5-4.0 million) with conduit/look-through treatment, that allows current income for the now widowed spouse, that leaves the underlying balance to the children, but does not rely on straight line single life expectancy calculations (subtracting 1 for the denominator every year from the initial life expectancy) and instead allows for the spouse to recalculate her life expectancy every year?

Bottom line…IRA was split in half, with half going directly to my mom and half going into a classic bypass/conduit/look through trust for her benefit until her death, at which point any remaining interest is split 33-33-33 among the 3 remaining children. The problem is that if she lives to her life expectancy, the trust assets are emptied back into her estate as IRA distributions, with nothing left in the trust assets to pass onto the kids.

Assume that she needs the RMD income from the $4.5 million IRA to live and that it was not desirable for IRA assets to go directly to the kids at time of death due to need for creditor protection and spendthrift issues. So while the trust seems desirable on two accounts (saving of estate tax on $1 million in dad’s estate and protecting assets from creditors for mom’s benefit), these attributes are somewhat compromised by the accelerated distributions from the trust and tying the emptying of the IRA Trust assets to her life expectancy forever (when she passes, I believe the remaining trust assets will need to be emptied by the kids based on her remaining life expectancy).

Does this assessment sound right and is there a workaround or any lessons to be learned from this for future endeavors?

Your input is greatly appreciated.

SR