zxcvar wrote:
- quote -

Can you do that? Well, yes, the trust can be a beneficiary
of an IRA. Do you want to do that? Well, that's a totally
different question that depends on the terms of the trust
and what your primary goals are.

The hitch is that unless the trust meets very strict
guidelines in the regulations, if the IRA passes to the
trust the children will not be able to use their own life
expectancies to determine the required annual distributions.
However, meeting those strict guidelines may end up
requiring you to have trust provisions you do not want in
there, or to not have provisions you would like to be in there.

So, honestly, most often it's a trade-off between the tax
and non-tax goals--and there's likely no right answer.
However, I will say that from a practical standpoint, it's
likely best if you really *want* to use a trust to be the
beneficiary *and* be able to look through it to the kids,
that you establish a separate trust just to accept the IRA
distributions. That makes it a lot easier to insure that
the terms of the trust don't cause you to lose the ability
to look through the trust *AND* that the terms imposed on
this trust by the IRA distribution regulations don't "spill
over" into other property that you would prefer to have the
trust retain greater control over.

So the final answer--consult the legal counsel that drafted
the trust and let him/her know if you are looking for the
maximum tax advantage.

--
Ed Zollars, CPA
Phoenix, Arizona

Greetings! My two children have trusts in their name. Can I name these
trusts as beneficiary of IRA Rollover plan? With thanks.