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Subject:  Re: Protecting your heirs Date:  7/9/2000  2:03 PM
Author:  SuzanneSLO Number:  23211 of 88513

ELNbluemax2: You asked: My husband's IRA just passed to me as Co-Trustee of our trust.

My condolences on the loss of your husband.

I assume from this statement that you were the beneficiary of your husband's IRA and that, on his passing, you rolled into your own IRA.

BUT, when I die the beneficiary is our Trust. When the beneficiaries get it from the Trust, I'm afraid they will be "zonked" for the taxes due on the whole IRA.

If the Trust has been properly drafted, the Trust beneficiaries should not be "zonked" any worse than if they recevied distribtuions directly. The pay-out period is still based on the age of the oldest beneficiary.

Although its not as simple as this and depends on your age, the age of your oldest beneficiary and the elections you made about caculating your life expectancy, you probably have about 20 years to distribute the IRA to yourself. If you die before that time, your heirs will get the balance of that time, plus (probably) a little more.

Thus, if you live for many more years, your heirs will have to take the distributions after your death over a shorter period of time. OTOH, you will have taken more of the funds from the IRA already, so there will be less for them to inherit in the IRA.

You can confound the IRS entirely by living for many more years and fully distributing the IRA to yourself during your lifetime!

I would talk to the attorney who set up your trust or your tax advisor about the exact numbers for distributions during your life and after death.

Sorry, can't help you with the annuity questions.

Good luck. -- Suzanne
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