Client has 4 children. One is on state assistance and client will be establishing testamentary trust for her benefit. Do 3 children receive designated beneficiary status (10 year rule) and the trust would fall under the 5 year rule?
The other 3 children named directly as beneficiaries would fall under the 10 year rule with annual beneficiary RMDs only required if client passes after their RBD.
Can you leave 75% to named designated beneficiaries and 25% to the estate. The will would create the testamentary trust in order to protect the state benefits the one child is receiving, realizing this would trigger the 5 year rule for that 25%.
Permalink Submitted by Kim Shields on Wed, 2023-11-08 17:52
The trust can qualify for the 10 year rule if it meets the requirements for a See-Through Trust.