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This would give them some planning possibilities each year, depending on their personal income tax and financial situations. You would only use the trust as a passthrough, as you don't to leave ordinary income undistributed at the trust(s) higher rates. BUT the co-trustee could be involved in the determining the desirable amount of each year's distribution in that 10-year period.

Thanks Bill. That's very helpful. We thought the withdrawals from the IRA would be taxed at the trust rate. In the very least I guess we could put the Roth portion in the trust and it still would not have to be distributed for 10 years? And would the boys then be getting the Roth distributed via the trust still as a tax free event, or would it then have to stay in the trust til 35?

We felt we had this figured out until they pulled the inherited IRA for non-spouses.

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