Facts:

62-year-old Wife (W) died intestate on March 28, 2022, survived by Husband (63-year-old) (H), and two adult children. The sole beneficiary under W’s will is her Living Revocable Trust (LRT).

W’s IRA did not have a beneficiary designation (according to the IRA custodian); thus, the IRA passes to W’s estate.

The LRT is a see-through trust. H is the only beneficiary of mandatory income distributions and discretionary distributions of principal. H is the trustee. At the death of H, the trust estate passes 1/2 to the daughter, 1/3 to the son, and 1/6 to the disabled grandchild (now a minor), who is the son’s child.

The LRT has a special provision for retirement benefits which requires the distribution of RMDs to H only and of the excess annual income of IRA over RMD if requested by H. Trustee has the authority to have the entire IRA distributed to the LRT. All distributions from the IRA are treated as income rather than principal for trust accounting purposes. All retirement benefits received by the trustee are to be immediately distributed to H. The LRT specifically states that “All other retirement benefits received by the trustee shall be allocated to the principal of the trust, but such allocation to the principal shall not in any way inhibit or prohibit the Trustee from making a principal distribution to XXXXXX[H] or any other permitted distributee in accordance with the express authorization to do so as elsewhere provided in this trust.”

The trust does not state that retirement benefits may not be used (or may not be used after the Beneficiary Finalization Date) for expenses of administration and distributing the decedent’s estate.

Goal: H desires to have the IRA custodian do a single trustee-to-trustee transfer or a series of trustee-to-trustee of the IRA to a new IRA established by H so that he may take RMDs over his life expectancy per the table. A single trustee-to-trustee (of this new IRA) will not work.

The series trustee-to-trustee transfer would be from the estate to the LRT and then from the LRT to the custodian of H’s new IRA. The LRT is a see-through trust, but I am concerned that it is not a qualified beneficiary. I would appreciate anyone’s thoughts on this and on any additional issues that you recognize. Thank you in advance.