Looking for comments on the following statements to confirm my understanding and belief on “go forward” new discretionary living trusts and potential amendment for owners of existing conduit trust that seems to be the most widely-discussed trust topic in the past few weeks.

1. It is my understanding that the IRS developed the concept of “see through trusts” to identify an individual beneficiary with a life expectancy to calculate RMDs for all beneficiaries of the trust, and that the oldest beneficiary was “designated” because that person had the shortest life expectancy. Therefore, one RMD amount was calculated each year, that amount was withdrawn, and distribution occurred under the terms of the trust, each beneficiary paid income taxes on the amount received, and assuming full distribution occurred, no income taxes were paid by the trust.

2. The “qualified trust” concept is not part of the code and the IRS has not indicated whether it will remain a viable strategy for owners who die after 1/1/20.

3. What is certain is that stretch for most beneficiaries is gone, the 5-year default rule remains, the 10-year rule is now in place for individual designated beneficiaries, and “eligible designated beneficiaries” have rules that allow a “stretch” to some degree. It would seem that the qualified trust concept would remain of benefit for owners who want to protect/control the distributions for the additional 5 years and for those eligible designated beneficiaries.

4. The question I have is how the qualified trust would work under the SECURE Act and if there is any uncertainty, whether it makes sense for the owner to direct the creation of IRA fractional shares upon death that would be inherited by the trustees of separate individual trusts created for each beneficiary. The IRA trust and the beneficiary’s rights to non-trust assets would be coordinated but distributed separately based upon tax issues, control, and beneficiary needs.