Jo Ann is married to Bill. Jo Ann and Bill are very well off, so Jo Ann decided to disclaim inherited trust assets at the time of her mother’s passing. Jo Ann’s 4 children are now beneficiaries of the trust. Jo Ann still remains sole trustee.

Fast forward to today. The assets are still in Trust. The trust has 2 accounts: NQ worth $800k and IRA Trust worth $50k. No distributions have ever been made to 4 children.

Bill and Jo Ann have their own Irrevocable Trust called the Bill and Jo Ann Trust. Bill is the Trustee. Beneficiaries of Bill and Jo Ann Trust are 4 children. Assets in trust are expected to be $10M+. They would like to “retitle” the Mother’s Trust into the name of Bill and Jo Ann Trust. The attorney gave a green light on this.

My questions:

1) Is there a way you can retitle the Mother’s IRA Trust of $50k to Bill and Jo Ann Trust without it being a taxable event? My understanding is Trust assets cannot legally be retitled. Therefore, in order to get this qualified portion of the Mother’s trust into the Bill and Jo Ann Trust, you would be forced to take a $50k IRA Distribution which would realize $50k of income inside Trust. And income would be subject to higher Trust rates assuming no distributions are made to children. A rollover option doesn’t appear to work in this case since both trusts have completely separate EINs.