RMD for a trust with a spouse beneficiary?

Submitted by Dan Garashvili on Thu, 2024-09-05 14:13

Last year, 2023, my wife passed away at the age of 76, and a trust inherited her traditional IRA. She took her RMD (uniform life expectancy) in 2023.

The trust is a valid see-through, conduit trust with me as the only beneficiary. I am 78 now and not married.

What is the RMD for me to use this year? The new regulations confused me, though they are perhaps more favorable than the previous ones. Here are some possible options that I could figure out:

1. My single life expectancy, recalculated yearly.

2. My uniform life expectancy.

3. My wife’s uniform life expectancy.

Do I have options for RMD? Is any of the above correct, if so, which one(s)? If not, how to calculate the correct RMD for me to take this year?

Thanks,

Dan

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Permalink Submitted by Alan - IRA critic on Thu, 2024-09-05 16:07

Option 1 – your remaining recalculated LE from Table I.

That said, the recent Sec 327 proposed Regs just released allows a sole spousal beneficiary to elect to be treated as the owner for RMD purposes only and therefore use the Uniform Table based on their age each year. These Regs do not clarify whether a qualified conduit trust trustee can also make this same election and use the Uniform Table, which of course would substantially lower the annual RMD from the IRA to the trust. I suggest that the trustee of the trust contact the IRA custodian to make this election, as there is nothing to lose, particularly if you do not need the larger single life RMDs.

Yet another issue here is that the Secure Act Regs issued in July eliminate the need to provide the IRA custodian with the trust beneficiary info by 10/31 of the year following the IRA owner’s death to qualify for see through. If the trustee of the trust (which you said is a see through) has not yet provided this info to the IRA custodian, they might verify with the custodian that this is not needed at the same time they make the election for the trust beneficiary (you) to be treated as the owner for RMD purposes.