RMD – Trust as Bene

Submitted by Kathy Baez on Mon, 2014-05-12 20:03

Husband and wife. Each has an IRA with us as well as a trust account. Clients wanted the Trust listed as the primary beneficiary for each of their IRAs. Husband 90 years old, wife is 86.
RMD’s were taken in 2013. Then husband dies in December 2013. How is the RMD calculated for the “Inherited IRA FBO the trust” (wife is now the sole trustee of the trust)? Is it based on the date of the trust or is it based on the wife?



Submitted by mk foss on Mon, 2014-05-12 21:51

Life expectancy is the default for all RMDs. If the trust qualifies as a “see through” trust (most do), then the spouse’s life expectancy is used with the single life table for future RMDs. If it doesn’t qualify, the decedent’s age is used with the  single life table. The date of the trust is never relevant.

Submitted by Bruce Steiner on Tue, 2014-05-13 03:05

It might be possible to get the IRA to the wife so she can roll it over.  See my article on this subject in the October 1997 issue of Estate Planning:  http://www.kkwc.com/docs/AR20050125164755.pdf .

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