IRA benficiary question

Good morning:

Is there a way for an individual to allow for the primary beneficiary to be a surviving spouse and limit their access to RMD’s and income. Then when the surviving spouse passes, allow for the balance to go back to other family beneficiaries?

If so, then could the family beneficiaries open a Beneficiary IRA?

Could this scenario also be accomplished through a Trusteed IRA?

Thank you for your help in advance.



A trusteed IRA could be used, but it is not a requirement. The IRA could establish a trust, perhaps a QTIP trust with provisions to do as they wish and name that trust as the IRA beneficiary. The age of the oldest trust beneficiary will determine the applicable RMD distribution period. If the trust provisions so specify or the trustee has discretion, separate inherited IRAs could eventually be assigned to the remaining beneficiaries.

Before you create a trusteed IRA, see my article on that subject in the September 2009 issue of Trusts & Estates:  https://www.kkwc.com/wp-content/uploads/2015/04/uf_trusteed_IRA.pdf 

It was mentioned earlier that the IRA could establish a trust, perhaps a QTIP trust with a provision to do as they wish and name the trust as beneficiary.  Would there need to be a new separate trust created for this asset, if there is a current trust already in place?  Or could they update the current trust?   How do we ensure the trust docuement is drafted with the poper language to allow for QTIP for spouse and also for spouse to take RMD’s and the other beneficiaries to be able to ulitize the Inherited IRA Provision?

  • The IRA owner creates the trust, not the IRA.  
  • Whether a separate trust is needed depends on the terms of the trust.  There are some special requrements for trusts that receive IRA benefits.  I discuss this in my article on this subject in the March 2004 issue of BNA Tax Management’s Estates, GIfts & Trusts Journal:  https://www.kkwc.com/wp-content/uploads/2015/04/AR20041209132954.pdf .  However, even if a separate trust is needed, a separate trust instrument is not needed.  The trust(s) that receive the IRA benefits can be in the Will.
  • If you want to make sure the trust is properly drafted, hire a competent lawyer.

I’m  leaving my wife an IRA in a QTIP, with my 7 children as eventual beneficiaries.  We are both 80 years old, and she is withdrawing RMD from her own IRA. Will the QTIP RMD factor during her lifetimebe from the Single Life Expectancy Table (SLET), or from (SLET minus 1) ? Also, are the federal taxes due on the RMD to be paid  after distribution  to my wife, using her tax filing status as Surviving Spouse, or is the tax payment made within the QTIP prior to distribution using a different filing status? If paid within the QTIP, what filing status is used?

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