Forced RMD
There’s a planning group that’s promoting a ‘forced RMD’ option for IRA owners to select that would apply to future beneficiaries and not give the kids and grandchildren, for instance, the alternative of accelerating distributions from their inherited IRA’s. Comments?
Permalink Submitted by Bruce Steiner on Thu, 2008-09-04 22:43
People did that (at least with qualified plans) before the proposed regulations came out in 1987 permitting trusts as beneficiaries. But now that we know it’s possible to leave IRA benefits to a trust, why not leave the IRA benefits in trust for the person, so that the trustee can withdraw and distribute more to the beneficiary if needed, or accumulate some or all of the required distributions in the trust if they are not currently needed?
Bruce Steiner, attorney
NYC
also admitted in NJ and FL
Permalink Submitted by Al Fry on Fri, 2008-09-05 04:15
Some people promote this via a variable annuity. While it sounds good, it is not enforcable as per the SEC 1040 Act. Of course if the IRA owner is dead, who’s to complain?
Permalink Submitted by Alan Spross on Fri, 2008-09-05 04:33
It would be great to see a meaningful survey of beneficiaries selecting one of the following as their opinion relative to restrictions on their access to inherited funds, taken perhaps 5 years down the road:
1) The restriction was justified and appreciated
2) The restriction was justified but NOT appreciated
3) The restriction was justified at the time but no longer fits the situation
4) The restriction was not justified or appreciated
As Al indicated, the owner is in no condition to care, but there could be close survivors who must listen to some long lasting negative feelings toward the departed.