Family Trust & IRA – Secure 2.0 Act 2022.

Submitted by Marina Ferrone on Tue, 2023-12-05 18:21

1) If taxpayers die before age 73, will IRA’s of both T/P & spouse be distributed with in 10 yrs?
2) Would Family Trust pay any taxes due from any IRA distribution?
3) Would the descendants not pay pay tax as a result of #2 above?



Submitted by Alan - IRA critic on Tue, 2023-12-05 18:52

  1. Only if the trust is qualified for look through. If not qualified, 5 years.
  2. Trust would owe the taxes if distributions are accumulated in the trust, but the trust beneficiaries will report the income if the distributions are passed through to the trust beneficiaries. The trust provisions and/or trustee discretion will determine the handling of the distributions.  No annual RMDs will be required from the IRA, just the 10 year rule or 5 year rule if the trust is not qualified.
  3. Taxes are due only once on the distributions and post distribution gains, by either the trust or the beneficiaries. 

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