Trust as beneficiary
if a pass thru revocable living trust is established with 4 beneficiaries, when the owner of the trust dies, can each beneficiary set up their own bene IRA and have the 10 yrs to make full distribution on their account? or because the trust was the beneficiary when the owner died they are held to the 5 yr distribution and taxed at trust rates?
the statement i am looking at today, the account registration is
Inherited IRA from IRA of Revocable intervivos trust Agr, Bene of client, custodian.
Permalink Submitted by Alan - IRA critic on Tue, 2021-07-06 16:37
The trust trustee can only assign the inherited IRA to the trust beneficiaries if the trust permits it, and the IRA custodian will accept the assignment request. Assignment does not change the RMD distribution period allowed to each beneficiary, which will usually be the 10 year rule if the trust qualified for look through. If the trust was not qualified, the 5 year rule applies if owner passed prior to RBD, and owner’s remaining life expectancy if owner passed after the RBD. If distributions are made to the trust and not accumulated in the trust, they can be passed through to the trust beneficiaries and will be taxed at each beneficiary’s marginal rate.
Permalink Submitted by Bruce Steiner on Thu, 2021-07-08 22:24
If you want the IRA to go to the 4 individuals, why not simply name them as the beneficiaries of the IRA?