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What if the parents have a trust that is the beneficiary of their IRA and their children as trustees. Could the kids avoid taxes by simply leaving the IRA in the trust until their own income drops or they move to a lower tax state?

Technically, yes. The kids avoid the tax.

Unfortunately, the trust would pay taxes instead. Trusts pay taxes at rates that are almost always higher (and often a LOT higher) than the kids would pay on the same income.

So leaving the IRA to a trust is not a good solution.

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