IRA bene is a Trust
Deceased client IRA went into a trust checking account after death.
4 kid bene’s of Trust want to stretch out over the new 10-year rule.
Is the fact that the funds, actually sent from IRA administrator to the trustee (then into checking account)
blown this option and they now have to take as current year income?
if yes – no work arounds available?
Permalink Submitted by Alan - IRA critic on Mon, 2020-11-02 21:56
A major error has been committed by the trustee of the trust and there is no way around this. The IRA custodian will be issuing a 1099R in January for the full amount distributed. The trust beneficiaries may consider litigation against the trustee unless there was a valid yet unknown reason for the lump sum distribution. Now that the trust holds the funds, the distribution will be taxed at the higher trust rates unless it is passed through to the beneficiaries.