revocable trust as primary benef on IRA

Submitted by Douglas Bauerband on Fri, 2020-02-07 17:12

Have a new client who’s husband put a revocable trust as the Primary Beny on his Thrift Savings Plan (IRA). He passed away and the Thrift savings plan wants to send a check to her payable to the trust, which will be fully taxable.

a. Can she disclaim the money under the joint trust and have them rollover to her IRA?

b. (silly question but had to ask) Can she rollover the check made out to the trust under the 60 day rule to her IRA?

c. is there anything else that can be done?

Thank you.
Douglas



Submitted by Alan - IRA critic on Fri, 2020-02-07 18:45

  • Are you referring to the federal TSP?  These are not IRAs.
  • When was the DOD, and husband’s age at the DOD?
  • Is the trust qualified for look through treatment? Is she the sole beneficiary of the trust?

Submitted by Douglas Bauerband on Fri, 2020-02-07 19:26

  • Are you referring to the federal TSP?  These are not IRAs.  Yes, Federal TSP
  • When was the DOD, 12/01/2019 and husband’s age at the DOD? 71
  • Is the trust qualified for look through treatment? Is she the sole beneficiary of the trust?  Do not have trust document but she stated it was a “revocable joint trust”

thank you,Douglas

Submitted by Bruce Steiner on Fri, 2020-02-07 22:24

  • Why didn’t he simply name her as the beneficiary of his TSP benefits?
  • [Edited to remove sentence on whether TSP requires the spouse to consent to a beneficiary designation in favor of someone other than the spouse.  DMx is correct.  The TSP doesn’t require spousal consent for this.  It may be because, when the TSP was created, TSP balances were relatively small, and most Federal employees had significant CSRS pensions which provided survivorship annuities for the spouse unless the spouse agreed to waive it.]

Submitted by David Mertz on Sat, 2020-02-08 01:02

tsp.gov indicates that the federal TSP is not covered by ERISA, so it appears that spousal consent to name a beneficiary other than the spouse is not required.  There is nothing on the TSP beneficiary designation form requiring the signature of the spouse.

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