Withrawal/tax rules for spouse who is beneficiary of Roth IRA under QTIP Trust
My wife is beneficiary of Q-TIP Trust, and when I die part of the Trust assets will be my Roth IRA, created 15 years ago. After I die, with all income of the Trust must be paid to her and she may invade principal for support. Does she have RMD requirements for this Roth and are withdrawals tax free for her?
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-26 16:58
Of course, the trust beneficiary eliminates the option for your wife to make the Roth IRA her own and avoid RMDs. If the QTIP trust is a qualified conduit trust, there will be annual beneficiary RMDs based on her single life expectancy. If the trust is an accumulation trust, then the other trust beneficiaries will have to be factored in to determine the RMD rate, which would also likely make the Roth subject to the 10 year rule.
In either case, the Roth IRA is qualified, so all distributions made to the trust will be tax free to the trust and to her.
But if the trust is not qualified for look through, the 5 year rule will apply to the inherited Roth.