inherited IRA by a trust
I have a client from MI. by the name of Don who passed away this past Nov. at the age of 78. Don has $534,744 in five different IRA’S with the following companies: Prudential(American Skandia); Allianz Life; Old Mutual; North American; & U.S. Allianz. The beneficiary is Don’s Revocable Living Trust. His children, Glenn(age 51) and his daughter Rhonda(age 48), are the beneficiaries of the trust. I am trying to set up an Inherited IRA to the trust and then split to Glenn & Rhonda, in trust. Most of the above companies will ONLY write a check to Don’s trust, which is the primary beneficiary. The problem is this would generate a sizeable income tax in the year this is done. HOW DO I GET AROUND THIS? I am wondering if I should, or could, transfer Don’s IRA to another carrier who is set up to recieve an “Inherited IRA”? If I can, how would the registration be titled and what SS# or TIN would I use? ANY HELP WILL BE APPRECIATED
Permalink Submitted by Bruce Steiner on Sun, 2008-12-14 22:06
If the existing custodians will cooperate, perhaps the trustees could set up inherited IRAs with the existing custodians, and then move them to a friendlier custodian, and then divide the IRA. If not, then a fallback might be for the trustees to take distributions over Glenn’s life expectancy and then pay the distributions over to Glenn and Rhonda or their separate trusts.