p. 170 of Slott’s latest book (Your Complete…..Road Map)..
……Starts out with a Q and A with the question being along the lines of “can my children or spouse end a trust I set up once I die”?
Ed’s answer is “yes, if you give them authority to do so in the trust itself. But even if you don’t, ending the trust may still be possible if all trust beneficiaries agree.” He then says, “but it will be costly and time-consuming. They will need a PLR form the IRA allowing them to end the trust and have all funds in the inherited IRA transferred directly into their individual inherited IRAs”.
Is it typical that a trust set up as beneficiary of QRP or IRA money be dissolved in first year or so or do RMDs need to flow thru trust for ever since RMD is based on oldest beneficiary?
Thanks for any and all help.
Permalink Submitted by Al Fry on Tue, 2007-09-04 21:06
It all depends on the trust wording. In a typical A-B trust, if there is a surviving spouse, the family trust (Usually “B”) many times lasts until the surviving spouse dies, and then may terminate. If it is just a trust for children, they sometimes pay shares out at certain ages, then terminating when all benes are a certain age. But then there are generation-skipping and Dynasty trusts, that terminate at a much later time. In any event, if a IRA is payable to a trust with multiple benes, then yes, it would use the oldest benes age for RMDs, even if trust terminates and splits up the IRA into several IRAs for the benes.