Mom passed away naming her Trust as the beneficiary of her IRA
Mom
Birth date 8/1/1931
Date of death 2/3/2018
Age 87 year of death
satisfied 2018 RMD
Mom named her Trust as primary beneficiary of her IRA
Trust names three daughters as beneficiaries (one daughter died 2/3/18 at the age of 59)
(Living daughters)
Daughter 1 – age 58
Daughter 2 – age 62
Mom’s IRA was transferred into an inherited IRA FBO of the Trust name
From there, the trustee instructed the custodian to establish two inherited IRAs for each of the daughters
2019 RMD’s for both inherited IRAs will be calculated using the single life expectancy of daughter 2 decreasing by 1 each year after.
Can you please confirm that the above was done properly?
Permalink Submitted by Alan - IRA critic on Wed, 2018-10-31 20:51
Yes, this is correct assuming that the trust was qualified for look through (aka qualified trust). Among other requirements, the trustee of the trust must submit the trust info to the IRA custodian by 10/31/2019. If this was or is not done by this deadline, then the trust is treated as non qualified, and then both daughters would have to use Mom’s remaining life expectancy for RMDs (single life table), and that would cost them much of the stretch period.
Permalink Submitted by Bruce Steiner on Sat, 2018-11-10 23:27
Why such complexity? Why didn’t she simply name her daughters (or trusts for her daughters) as the beneficiaries instead of running the IRA through a trust that ended upon her death?