IRA Beneficiary is a Trust

Submitted by Robert Smith on Fri, 2023-02-24 00:27

Individual died at age 86. A Trust is the IRA beneficiary. 2 Children are the beneficiaries of the trust. Not sure if it is a look through trust. If it is, each beneficiary needs to take RMDs each year based on the oldest beneficiaries age and deplete the account by the 10th year, correct? The deceased also had IRAs that named the children and not the trust as beneficiaries. The children will open inherited IRAs and take RMDs based on each life expectancy factor. Can this Inherited IRA be combined with the one that came from the trust as beneficiary?

If the trust is not a look through, what are the distribution requirements?



Submitted by Alan - IRA critic on Fri, 2023-02-24 01:55

  • Correct about the trust RMDs if trust is qualified. If the trust is not qualified for look through RMDs to the trust are based on the decedent’s remaining LE.  Also correct about the RMDs for the individually inherited IRAs. 
  • A trust inherited IRA cannot be combined with an individually inherited IRA. However, if the trust provisions allow the trustee to assign each trust beneficiary share to the beneficiary as individual inherited IRAs, the older beneficiary can combine their inherited IRAs because the divisor will be the same, but the younger cannot because their divisors will differ. Assignment does not change the beneficiary divisors. No combination is allowed if the trust is NQ, since the divisors will differ.

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