IRA/qualified assets INTO trust while still ALIVE – PLR????
HI
Any word or thoughts on a IRA owner putting the IRA into a trust while alive (assumes grantor revocable, but not sure). Heard that this might now be possible?
There seems to be a great amount of discussion about naming a trust beneficiary, but what about putting the qualified assets [i]into [/i]a trust now?
Facts – Susan has an IRA with x dollars and a trust with house and other assets, or creates a completely new trust just for the qualifed assets – IRA must be owned by a ‘person’ and it is my understanding that a current PLR request is arguing that a revocable grantor trust is distregarded and does not disqualify the plan.
Done for estate, credit shelter, family planning, probate and a few other reasons – obviously, does not want to take the qualifed distribution and tax it all now.
thx
Chloe
Permalink Submitted by Al Fry on Tue, 2008-02-05 23:16
It cannot be put into the client’s trust while alive. You may be thinking about a trust at the custodian level. I believe M-L recently moved theirs into an IRA trust. No impact on client.
Permalink Submitted by Bruce Steiner on Wed, 2008-02-06 05:02
In PLR 200620025, the IRS allowed a beneficiary of an IRA to transfer his interest in the IRA to a supplemental needs trust.
It’s not at all clear that the IRS would allow an IRA owner (as opposed to a beneficiary of an IRA) to transfer the IRA to a trust.
An IRA is already essentially a revocable trust. Even if it were permitted, it would not accomplish anything to transfer an IRA to a revocable trust.
Permalink Submitted by Al Fry on Wed, 2008-02-06 21:38
You bring up a good point, Bruce. I wonder if an IRA owner became disabled or injured if he/she could have there IRA transferred to a self- directed grantor irrevocable trust. It might be good fodder for a PLR if you run into that situation.