IRT (Individual Retirement Trust)
I am requesting information on Individual Retirement Trusts. I recently inherited an IRA through a trust, and was wondering what options are available to me. The original owner named multiple individual beneficiaries, and the accounts have been established and titled, Deceased Name Inherited IRT FBO beneficiaries name. The trustee (bank) says they are in control of the accounts and will distribute monies when they think it is necessary. Is that correct, and what does the IRS code say in reference to this matter? Any help would be greatly appreciated.
Permalink Submitted by Alan Spross on Sat, 2009-05-16 19:08
If this is one of those combined IRA and trust agreements offered by certain brokers such as Merrill Lynch, then you are not an individual designated beneficiary but a trust beneficiary. You cannot be both, so this is the first issue to be resolved. Like any other IRA trust beneficiary, it must be determined if the trust is qualified for look through treatment for the individual trust beneficiairies. If so, then you might be able to establish an RMD schedule based on the oldest individual trust beneficiary.
Permalink Submitted by Bruce Steiner on Sun, 2009-05-17 01:57
I’m writing an article for the September issue of Trusts & Estates on why not to set up one of those trusteed IRAs (but instead to leave your IRA benefits in trust rather than outright if appropriate). Stay tuned.