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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Re: RMD before death? Date: 10/14/2013 10:14 AM
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The problem with having other than "natural persons" names as IRA beneficiaries is that the entire account must be distributed within 5 years after death of the owner."

I dislike questioning one of the resident pros, but I do not think that this is accurate. I believe that the "stretch" provsiions are stillavailableif the trust is a "qualified trust".


Oh, heavens, nothing to dislike. There was that time in 1955 I was flat out wrong.

Both JAFO and synchronicity correctly pointed out that it is possible for a trust to be set up so that even if it's the beneficiary of an IRA the payout can be treated as if the beneficiaries of the trust were the stated beneficiaries of the IRA. I should not have made such a general statement.

Here's why I still believe it's a lousy idea to name a trust as an IRA beneficiary.

If the trust doesn't correctly jump through all the hoops we're back to a non-individual as beneficiary and the 5 year payout. Even if everything's hunky dory with the trust as initially drawn up, things do change. To me it's a lot easier to revise IRA beneficiaries than it is to revise a trust. Cheaper too.

YMMV

Phil
Rule Your Retirement Home Fool
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