If the trust is qualified for “look through treatment” (most are), then the nephew’s age can be used to calculate RMDs. However, since there are apparently other beneficiaries of the same IRA, separate accounts need to be established by the end of the year following the year of the owner’s death. If these separate inherited IRA accounts are not created by the deadline, then the other beneficiaries of the IRA can have a negative affect on the RMD for the qualified trust. If the trust is NOT qualified, then it is treated as a non individual beneficiary and RMDs will be much larger.

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From IRS Pub 590 B:

Trust as beneficiary. A trust cannot be a designated beneficiary even if it is a named beneficiary. However, the beneficiaries of a trust will be treated as having been des-ignated beneficiaries for purposes of determining required minimum distributions after the owner’s death (or after the death of the owner’s surviving spouse described in Death of surviving spouse prior to date distributions begin, earlier) if all of the following are true:  

• The trust is a valid trust under state law, or would be but for the fact that there is no corpus.

   

• The trust is irrevocable or became, by its terms, irrevocable upon the owner’s death.

   

• The beneficiaries of the trust who are beneficiaries with respect to the trust’s interest in the owner’s benefit are identifiable from the trust instrument.

   

• The trustee of the trust provides the IRA custodian or trustee with the documentation required by that custodian or trustee. The trustee of the trust should contact the IRA custodian or trustee for details on the documentation required for a specific plan.

   

• The deadline for the trustee to provide the beneficiary documentation to the IRA custodian or trustee is October 31 of the year following the year of the owner’s death.

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