I have not seen this issue raised before.

I went to an initial consultation with an estate planning attorney to see about a conduit trust for my IRA (I had seen a statement that the average inherited IRA is depleted in 17 months).

He told me that he does not believe in conduit trusts for IRAs. He said that the cost to setup, administer, tax returns, etc… are not worth it when all you are doing is pass the RMDs through to the beneficiaries.

Instead he wants to do a custom beneficiary designation with and I quote “trust-like” language. He said that there are private letter rulings supporting your right to restrict the distributions by your beneficiaries. Also, he said that with proper (and I don’t remember the terminology) language protecting the custodian, he has had them accepted by most major custodians.

Now, I am not one to usually question someone who suggests ways of saving me money, but what do the experts think?

1. PLRs are individual decisions, but I guess a lot of things are done based on their precedence. How safe is this?
2. IRS rulings in general are only a ruling on keeping the tax status of the accounts with the actions your are taking correct?
3. So my basic question has to do with enforceability of this. Would it stand up?

I guess my gut feeling is that even if this can ultimately be successfully challenged it is somewhat like a standard boilerplate liability disclaimer. Even if it could be challenged, most people don’t. At least my beneficiaries will clearly know my desires and somewhat likely to follow them.

Besides it does seems like a whole lot less hassle all the way around. Any thoughts???