I’m working with an existing client and his estate planning attorney in regards to updating his Prim Bene on his TIRA to a Conduit Trust. Value of TIRA is 1.5 million, not married and has 3 children. His intent is to pay out only RMD’s to his 3 children (using the oldest for calculating purposes) until the oldest reaches age 50 which is triggering event for all to have access to the remaining IRA funds should they wish. The estate planning attorney feels at owners death, one Bene IRA will be created owned by the Conduit Trust. I don’t see this as a problem until oldest beneficiary reaches age 50 and 1 of the 3 may want more funds than RMD. I would assume we would want to create 3 Bene IRA’s at death of IRA owner divided into 1/3 amounts for each Conduit Trust beneficiary. This will allow each bene to have a separate risk tolerance and pool of assets upon age 50 of the oldest. If 1 of the 3 bene’s wants a partial cash out at age 50 and had only 1 Bene IRA, don’t see how the ongoing RMD’s would be handled since the RMD’s are no longer equal due to1 bene taking out funds.

If I’m correct with my assumption that 3 Bene IRA’s should be created under Conduit Trust how would each Bene IRA be titled?

Also, the Conduit trust has a provision allowing Trustee after death of Conduit Trust grantor ” to amend trust for the sole purpose of complying with applicable law while carrying out the purpose of this trust”. Does this not then make the Conduit Trust “non qualified” disallowing the stretch using the oldest of 3 bene’s and then would required descendants life expectancy minus 1 each year to be used for calculating RMD’s??