Generally, if the trust is qualified for look through treatment, the life expectancy of the oldest trust beneficiary will apply to all beneficiaries of the trust. Separate account rules do not apply to trust beneficiaries.

Her own life expectancy would only come into play if client passed on or after the RBD and the trust was NOT qualified. In that case her remaining non recalculated life expectancy would apply.

This question is best suited to Bruce Steiner, an expert in this area. Perhaps a special needs trust should be created for any Medicaid recipient children, and if so you may be looking at multiple trusts and added issues.

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Alan: thanks for the kind words.

How can she name “her trust” as the beneficiary of her IRA? She can’t be a beneficiary of a trust after she dies. I assume you meant she named a trust or trusts for one or more of her children as the beneficiary or beneficiaries. If that’s the case, assuming the requirements for naming a trust as beneficiary are satisfied, the required distributions are based on the life expectancy of the oldest beneficiary of the trust. That’s likely to be the oldest beneficiary of the trust.

If the beneficiaries have special needs, then it might or might not be appropriate for them to be trustees, depending upon their particular special needs.

For more on this, see my article on this subject in the March 2004 issue of BNA Tax Management’s Estates, Gifts & Trusts Journal: http://www.kkwc.com/docs/AR20041209132954.pdf.

While perhaps too complicated for this forum, if the trust does not satisfy the requirements for a trust as beneficiary of an IRA, it may be possible to fix this after death.

Given all of these issues, and their potential complexity, the original poster may wish to consult with tax/estates counsel, who can review the trust and give him more specific advice.

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