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Author: tstalkin101 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75338  
Subject: upon death..what is best way to tranfer ny IRAs Date: 2/6/2005 4:50 PM
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? In some type of living trust or...?

Thanks in advance Fools,

Steve

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44358 of 75338
Subject: Re: upon death..what is best way to tranfer ny I Date: 2/6/2005 4:59 PM
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Isn't that what your primary and secondary beneficiary designation is for?

intercst

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Author: Matt1344 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44359 of 75338
Subject: Re: upon death..what is best way to tranfer ny I Date: 2/6/2005 5:14 PM
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"? In some type of living trust or...?

Hi Steve,

Until an expert weighs in, I don't think an IRA is or can be placed in a trust... I think the distribution is done by way of the beneficiary(ies) you name. Depending on who it is, I believe there are rules as to how the distribution occurs. A spouse may be different than other people. I think your spouse "may" be able to keep the funds in an IRA status but others will have to take the money and pay the taxes, although I'm not sure if there are any income averaging provisions.

I'm sure someone will direct you to the proper publication where you can read the rules. If you want you can try at the www.irs.gov site.

Regards, Ken ("As Tim McGraw sings, "I hope you get the chance to live like you were dying.")

If you want a Spell Checker for InternetExplorer or Firefox to check MF posts or other web forms: IE => http://www.iespell.com or for Firefox => http://tinyurl.com/3pdwt

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Author: mcain6925 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44360 of 75338
Subject: Re: upon death..what is best way to tranfer ny I Date: 2/7/2005 12:17 AM
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Until an expert weighs in, I don't think an IRA is or can be placed in a trust... I think the distribution is done by way of the beneficiary(ies) you name. Depending on who it is, I believe there are rules as to how the distribution occurs. A spouse may be different than other people. I think your spouse "may" be able to keep the funds in an IRA status but others will have to take the money and pay the taxes, although I'm not sure if there are any income averaging provisions.

I'm not an expert, but at one point I knew some of this for a traditional IRA (Roths are probably different). If you are married when you die, your spouse can roll your IRA over into their own. Distributions from that will usually follow the normal rules. A trust can definitely be the beneficiary of an IRA, but the tax issues upon your death can be complicated. Estate taxes may be involved if the sums are large enough, and at some point income taxes have to be paid (unless, for example, the beneficiary of the trust is a non-profit that does not pay income taxes).

The theory behind all of this is that the government has allowed you to accumulate assets on a tax-deferred basis FOR YOUR RETIREMENT, and that the deferred income taxes need to be paid within your lifetime (or your "expected" actuarial lifetime at your death). This is one of those cases where, especially if large sums are involved, it seems appropriate to find a good financial professional and pay them for a couple hours of their time to look at your entire situation and your desires for where the money should end up after your death.

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44361 of 75338
Subject: Re: upon death..what is best way to tranfer ny I Date: 2/7/2005 12:38 PM
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Unless you like giving LOTS of money to the government, don't name a trust as a beneficiary to an IRA without expert advice.

The problem is that this can be considered an IRA distribution and can be taxable just like the owner and withdrawn all the money the day they died. If the owner of the IRA was under 59.5 years old there may be the 10% penalty as well.

Even naming the primary and secondary beneficiary can be complicated so you should really read the IRS publication that covers this.

Greg


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Author: bogwan Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44366 of 75338
Subject: Re: upon death..what is best way to tranfer ny I Date: 2/7/2005 7:14 PM
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I inherited an IRA, I was listed as a beneficiary.

The IRA became a 'beneficial IRA' which evidently is some kind fo trust.

I have been unable to transfer the 'beneficial IRA' to a different company so I am stuck with a company I do not like all that much.

DANGER: Inform your beneficiary that they will have to make minimum manditory withdrawls or they will get into big trouble with the IRS.



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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44367 of 75338
Subject: Re: upon death..what is best way to tranfer ny I Date: 2/7/2005 8:40 PM
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Isn't that what your primary and secondary beneficiary designation is for?

Exactly, don't think there's a better way than having the acct pass directly to the beneficiary (avoiding the estate), then having the beneficiary stretch the withdrawals over his/her life expectancy.

Nick


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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44390 of 75338
Subject: Re: upon death..what is best way to tranfer ny I Date: 2/8/2005 2:42 PM
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don't think there's a better way than having the acct pass directly to the beneficiary (avoiding the estate), It would not avoid the estate but it would avoid probate, is that what you meant?

then having the beneficiary stretch the withdrawals over his/her life expectancy. That depends on who the beneficiary is and if the deceased had started taking distributions.

buzman


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