I.R.A. beneficiaries for minors
Invesco will not allow us to use a Testementary trust as a beneficiary, what do you suggest we do? Also, with a conduit trust for minors, what age can we no longer use RMD’s?
Frank
Invesco will not allow us to use a Testementary trust as a beneficiary, what do you suggest we do? Also, with a conduit trust for minors, what age can we no longer use RMD’s?
Frank
Permalink Submitted by Alan - IRA critic on Wed, 2021-03-17 16:29
That is an odd restriction, since naming a trust created under the will is commonplace. If that is what the IRA owner wants, they should transfer the IRA to another custodian.
Under the Secure Act, the minor child of the IRA owner can use LE RMDs until the age of majority. For these purposes, the age of majority can extend to as long as age 26 if the minor is undertaking a higher education program. Once the minor no longer qualifies for such a program, then the 10 year rule kicks in. During the 10 year period, there are no annual RMDs, but the account must be drained at the end of the 10 years. Complete IRS Regs on the Secure Act have not been issued that might address gray areas in determining the age of majority, but if there is no higher education program then state law would determine that age.