INHERITED IRA
IF I name my spouse as beneficiary and my children as successor beneficiary how to properly name follow up beneficiaries as successor in stripe to each of my child? can my spouse and children decline and benefit go to grand children and if they are still minor do they have to take distribution in 10 years?
Permalink Submitted by Alan - IRA critic on Mon, 2022-01-10 21:55
You could name your children as contingent beneficiaries per stirpes and your spouse could disclaim if desired, and if so, the children would be subject to the 10 year rule (unless disabled). Should any child also disclaim, the next per stirpes beneficiary would be subject to the same 10 year rule which is not extended due to more beneficiaries. Note that if your spouse accepted the IRA without disclaiming, the spouse needs to name their own beneficiaries as the the contingent beneficiaries you named would no longer be valid unless spouse also named them after your death. If you wanted to control what your spouse does, you would need to name an appropriate trust as your IRA beneficiary.
Permalink Submitted by gautam SHAH on Tue, 2022-01-11 15:23
Thank you for detail explaination. what is appropriate TRUST to follow my desire? CAN trust be beneficiary of percentage of IRA?
Permalink Submitted by Bruce Steiner on Thu, 2022-01-13 00:01
The share of everyone other than the spouse could be in trust, to keep their shares out of their estates for estate tax purposes, and to protect their shares against their creditors and spouses (current and future), and Medicaid.
Bruce Steiner
Permalink Submitted by gautam SHAH on Thu, 2022-01-13 18:28
Thank you Bruce for valuable opinion. what kind of trust and can i create for my children and theire children one for all kids? cost for such trust and any yearly requirement. Is this IRA TRUST?
Permalink Submitted by Bruce Steiner on Fri, 2022-01-14 04:13
The trusts for the children that receive the IRA benefits are essentially the same as the trusts that receive the other assets, except for a few provisions to make sure they qualify as designated beneficiaries. You can include them in your Will. There’s virtually no additional cost to including this in a Will.
After your death (or the death of the survivor of you and your spouse if the children’s trusts become effective at the surviving spouse’s death), the cost is having to do another income tax return. The cost of that should be relatively modest (or nothing if one of the trustees is able to do the returns).
Bruce Steiner
Permalink Submitted by gautam SHAH on Fri, 2022-01-14 17:22
all taxes will go in irrevocable trust Thank you Bruce for detail explanation. If my desire is that I or my spouse can take RMD and if needed additional 2 to 3 percent every five years. when my children receive they have to empty in 10 years or if they decline go to grand children by stripe. can i put clause the distribution after taxes will go in individual trust irrevocable and beneficiary can take 5 percent every year. My thought is me my wife or my children will not need more than RMD so this can be strech?