Trustee’s options if a beneficairy declines to accept his share
A see-through trust holds an inherited IRA subject to RMDs and ten years emptying. There are three individual beneficiaries, with 40%, 30%, 30% shares. What are the options for the trustee in the following situations:
- One of the beneficiaries declines to accept his share of the inherited IRA.
- One of the beneficiaries, say A, asks the trustee to give full or a part of his share of distribution to another beneficiary, say B, and report as income to B.
Permalink Submitted by Alan - IRA critic on Sat, 2025-02-22 13:01
A disclaimer by A could be pursued subject to the trust provisions and state law pertaining to disclaimers by trust beneficiaries. A trust and estates attorney in the state should be consulted.
If the amount in question is modest, it might be easier for A to simply gift amounts to the others after receiving the distributions.
Note that a qualified disclaimer by the oldest trust beneficiary would alter the annual RMDs to the trust if the IRA owner passed after RBD.