Trust RMD
My daughter will be the beneficiary of a trust and I understand RMD’s paid to trust will be based on her age. My question is what happens when the trust terminates at age 35? Does the IRA now pay RMD’s to daughter directly on same schedule? Must the IRA pay out within 5 years?
Permalink Submitted by Alan - IRA critic on Wed, 2018-06-20 16:55
For the trust to receive RMDs using daughter’s age, she must be the oldest beneficiary of the trust and the trust must be qualified for look through. That RMD schedule would continue upon termination of the trust and assignment of the inherited IRA to her individually. If the trust is NOT qualified for look through treatment, then the 5 year rule would apply if you passed prior to your required beginning date, and your remaining life expectancy if you passed after the RBD.