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One question that I have is does it make sense to have a trust as a beneficiary of an IRA instead of using a TOD? The only function(s) that need to occur are splitting the IRA into three equal parts and are titled as Inherited IRA for each beneficiary?

Probably not, but ignore Tele's reasoning (or lack thereof). The real reason is that a trust would only have 5 years to completely disburse the account, and if the trust is paying the taxes, it will be taxed at the generally higher trust rates. If your kids split get it through a TOD, rather than the trust, they will each have 10 years to fully disburse their account, so they can figure out how to do it best for their own tax impacts.

Having just gone through splitting up an IRA that was inherited by children, I can say that it's not that hard to do. One of the beneficiaries just has to call the administrator (broker) and let them know that the owner has died. The administrator will request a copy of the death certificate. I was able to e-mail a PDF of the death certificate to the administrator. Then each beneficiary has to contact the administrator to get the IRA transferred to an inherited IRA - either at the current broker, or they can have it transferred to a brokerage of their choice.

AJ
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