Look Through Trust

Submitted by Ryan Smith on Thu, 2023-09-21 17:24

We have a client that passed away with an annuity IRA at age 63. She had her trust named as beneficiary. It has been determined that the trust is a see through/look through trust. Her two boys aged 29 and 30 are the sole beneficiaries of the trust. A few items/clarifications:
1. The treatment of see through allows the boys to use the 10 year rule.
2. Are the funds still held in a trust Inherited IRA for each child or are funds distributed to inherited IRAs for each child and are no longer in trust?

Thanks.



Submitted by Alan - IRA critic on Thu, 2023-09-21 18:17

  1. That is correct, except that the trust uses the 10 year rule.
  2. This depends on the trust provisions, and the trust provisions likely reflect the wishes of the client. If the trustee of the trust is allowed to distribute inherited IRAs out of the trust to the separate trust beneficiaries they will have their own inherited IRAs to manage, but the 10 year rule still applies.

 



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