Skip to main content
No. of Recommendations: 0
"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? "

It would seem to be NO.

IRAs are INDIVIDUAL Retirement accounts.

Upon death of the owner of the IRA, it needs to go to a beneficiary directly.

Normally, for a wife, it would pass to husband without written instructions. as a spouse.

Any other split will result in the 'heirs' having INDIVIDUAL retirement accounts which they will have to quickly spend down to ZERO.

IF the are younger than 72

" If the owner was younger than 72,* the assets must be completely distributed by December 31 of the 5th year containing the anniversary of the IRA owner's death."

https://www.fidelity.com/building-savings/learn-about-iras/i....

The IRS wants its money.

You can't dole out an IRA over 20 years if you are under 72 when you get it. Five years.

For a younger non-spouse 'inheritor', a boat load of taxes will be paid over those 5 years.

t.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.