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My stepdaughter's stepfather died in 2004 and among his assets was an IRA. The beneficiary of the IRA was a revocable trust that became irrevocable on his death. There are 3 beneficiaries of the trust. To avoid heavy taxes the custodian of the IRA split the IRA into 3 IRAs under direction from the trust (they did not do this until 2005). Now I believe each beneficiary must take a distribution this year, since he died last year, using the Table 1 Single Life Expectancy For Use by Beneficiaries.

The question is whether each beneficiary uses his/her age or the age of the oldest beneficiary. Since the trust was apparently a qualified trust, I think the trust can be the designated beneficiary but I'm not sure how the fact that the IRA was split into 3 affects the designated beneficiary rules. Pub 590 says "--the beneficiary with the shortest life expectancy will be the designated beneficiary if both of the following apply: 1/ all the beneficiaries are individuals and 2/the account or benefit has not been divided into separate accounts or shares for each beneficiary."

I'm hoping there's an expert out there but any and all thoughts will be appreciated.

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