I wish to leave my Roth IRA to my granddaughter. I understand that the only way I can do so with spending constraints and limitations is to name my Revocable Living Trust the beneficiary. I want my granddaughter to continue earning (accumulate) as much as she can during the 10 years after I pass. But, I have been told that continued earnings within the Trust, if left in the Trust during the 10-year period, are subject to income tax at the trust rate.

If the earnings are subject to income tax (especially trust tax), I am not anxious about losing up to 37% of the earnings. Therefore:

1. Are my premises correct?

2. Is there a way to will my Roth IRA to my granddaughter, with instructions and limitations as to the money’s use, without taxes accruing to the earnings?

Thank you!