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Subject:  Re: taxes and trusts Date:  3/28/2014  4:29 PM
Author:  PosFCF Number:  120616 of 127513

Funny that this thread is ongoing right now, as I have a question that relates to the taxation of IRAs where the trust is designated as the beneficiary.

First, the IRAs involved are both Roth and Traditional. Second, the assets are currently held in annuities, and it my understanding that in all of the annuities the Trust is the beneficiary.

My first concern when asked about this (and other issues not addressed in this post) was: "Will the Roths lose their tax-advantaged status in having the Trust as beneficiary rather than specific family heirs?"

Second, your answer that: The transfer to the beneficiary is not a taxable event. When money is withdrawn it's taxable to the beneficiary.

I assume that is because the OP was referring to a traditional IRA and distributions from them would be taxable to whoever got them.

I guess third would be whether the fact that they are all in annuities makes any difference to the issues related, especially to the Roths.

The owner claims his reason for not making the beneficiaries of the annuities his children and grandchildren is that his understanding that the RMD would be guided by the oldest beneficiary, but I thought this was changed so that each beneficiary can make their own determination.

I deal so rarely with annuities and Trusts as beneficiaries for qualified accounts that I figure you pros could at least point me in the proper direction.

The estate value would be well under $5 million (currently at around $3.6 million) and the State of residence is Florida which, I believe, gives the same credit as the Federal level.

He's consulted with an attorney who set up the Trust and asked some financial planners whose advice was so brief "A Roth is a Roth" that I question whether they were looking more toward the assets that are not part of this post than at the issues I've raised.

Again, I know this is a crazy time of year for you pros and do thank you in advance for any direction you can give me or point me toward.

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