Hello,

I apologize in advance for the detailed background, but I think it’s necessary for clarity.

I’m now working with a surviving spouse who is trustee of her deceased husband’s living trust. This is a second marriage and the deceased had two adult children from a previous relationship who are to receive equal shares of the trust in sub-trusts (with each child as trustee of their respective sub-trust). The grantor died in 2020 and the only assets in the trust at the time of death were the deceased’s house (with a mortgage) and about $100k cash. The deceased has a sizable IRA which listed the RLT (not the sub-trusts) as beneficiary.

The deceased and the surviving spouse married late in life and the deceased amended his trust to add his wife as co-trustee as well as the right for her to live in the home indefinitely with all home related expenses to be paid for by the trust. Shortly after the grantor died in 2020, the IRA was transferred to an inherited IRA registered to the deceased’s trust as bene.

The surviving spouse as trustee of the deceased’s trust withdrew approximately 10% (planning to spread distributions more or less equally over the 10-year distribution period) from the IRA in 2021. She distributed the withdrawal equally to the kid’s sub-trusts, holding back enough in the deceased’s trust to cover the home expenses for the year.

The surviving spouse has terminal cancer with a very short life expectancy and wants to wind down her role as trustee and have the kids take over. The two kids are successor co-trustees of the deceased’s trust.

Questions:
1. Can the Inherited IRA be split into two inherited IRAs titled to the two children’s sub-trusts as bene? or
2. Does the Inherited IRA stay titled to the deceased’s trust? And as successor trustees, the children then control the timing of withdrawals and the distribution of those withdrawals from the deceased’s trust to their sub-trusts?

Once again, I apologize for the lengthy post.

Thank you for any advice and guidance!