RMD when a trust for wife is beneficiary
my client has a revocable family trust with his wife as the primary beneficiary but his adult children as contingent beneficiaries at his spouses death. If he names the trust as beneficiary of his IRA, will it be an eligible beneficiary for purposes of the stretch RMD provisions or will it be bound to the 10-year rule because the children are contingent beneficiaries (or for some other reason)?
Permalink Submitted by Alan - IRA critic on Fri, 2022-03-18 00:15
The trust must be qualified for look through to consider the beneficiaries. Further, if the trust is a conduit trust for the spouse, she can be treated as an EDB and the trust can stretch the IRA over her recalculated life expectancy. However, if the trust is an accumulation trust that allows any IRA distributions to remain in the trust, the 10 year rule will apply even though the children are mere successor beneficiaries (not contingent beneficiaries).