Trusts have events that lead to their eventual termination. With the
provisions of the multigenerational IRA, the trust would last for 100 years
if the youngest beneficiary was born on the day the trust was created.


"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:Y4bNd.8136$Th1.2610[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -

- quote -

But in this case, a trust was the beneficiary. How do you determine its age,
and therefore its life expectancy? Maybe I just didn't understand your
answer.

Elizabeth Richardson

Stretch IRAs are held by a trust and can last 100 years less the age of the
youngest beneficiary. Example, 2 year old grand child is named a beneficiary
the trust would last 98 years.

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:IR4Nd.7135$Th1.5633[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -

"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
- quote -

Out of curiosity, how would the life expectancy of a trust be determined?

Elizabeth Richardson

On Wed, 2 Feb 2005 06:42:43 CST, "Steven"
<NOSPAMwallstreet71[at]comcast.net> wrote:

- quote -

I certainly don't want to disagree with Ed Slott (he wrote the book)
on retirement plans, but I suspect that the material is either
outdated or misunderstood. Here's my take on 401k non spouse
beneficiaries. If anyone disagrees, a cite would be appreciated.

Please note that the following applies to IRC rules - plan sponsors
are allowed to offer lump-sum distributions only so the best answer
comes from the plan document.

If the participant already began required minimum distributions (RMD)
before he or she died, the non spouse beneficiary must continue those
payments at the same rate or faster.

If the participant had not begun RMDs, the non spouse beneficiary must
start taking minimum withdrawals based on their life expectancy by the
end of the calendar year following the participant's death. If they
do not begin those distributions by then or request a lump sum
withdrawal by then, the default is that they must take a lump sum
distribution by the end of the 5th year following the death of the
participant.

Again, the plan document controls. The above is the IRC rule. Plan
sponsors can elect lump sum only, but they cannot claim that the lump
sum is an "IRS rule".

I *think* the above is correct. <grin> Cites to the contrary
appreciated.


-HW "Skip" Weldon
Columbia, SC

On Fri, 4 Feb 2005 10:14:16 CST, "MTW" <mtwingcpa[at]yahoo.com> wrote:


- quote -

I can't say that I blame them. On the other hand, from a financial
planning perspective, 401k participants who wish to give their
non-spouse beneficiary the option of lifetime installments need to
seek a more beneficiary-friendly arrangement - like IRA - and then to
roll to that plan when eligible and when it's economically feasible.

-HW "Skip" Weldon
Columbia, SC

HW "Skip" Weldon wrote:

- quote -

I suppose that employers don't want the long term administrative
responsibility - perhaps decades - associated with life
expectancy payouts.

MTW

On Wed, 2 Feb 2005 10:06:07 CST, "MTW" <mtwingcpa[at]yahoo.com> wrote:


- quote -

I wonder about this too. I have always thought that IRC allowed 401k
the same beneficiary choices as IRAs (lump-sum, 5year deferred and
life expectancy), but that many 401k custodians only offered lump for
in-house reasons.

I hope someone will post a cite if they know something to the
contrary.


-HW "Skip" Weldon
Columbia, SC

401k would have to be rolled over into a multigenerational or stretch IRA.


"MTW" <mtwingcpa[at]yahoo.com> wrote in message
news:36cbarF500ki4U1[at]individual.net...
- quote -

Steven wrote:

- quote -

I wondered about that. In any event, it would probably be
governed by the PLAN. If the plan itself does not allow for
deferred payouts, you would be out of luck.

I agree that rolling to an IRA while you are still alive is
probably the best/most predictable course of action.

MTW

According to Ed Slott, a 401k does not offer a stretch provision only IRAs
have that feature. He further writes in his book "The Retirement Savings
Time Bomb", that the only option is a 401k at best is a 5 year payout most
have lump sum distributions for a non-spousal bene.

If you are retired , your best option is to roll it over to an IRA. If you
are not, name your wife as the primary and the look through trust as the
contingent.


"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
newsmsvv0dm7naft9eu36rdt7ukdsjbq8kshs[at]4ax.com...
- quote -

On Tue, 1 Feb 2005 15:17:23 CST, "MTW" <mtwingcpa[at]yahoo.com> wrote:


- quote -

Excellent advice. None of us have seen your Trust wording, so we
can't comment. After talking with your Attorney, please come back and
let us know how this worked out.

-HW "Skip" Weldon
Columbia, SC

Mike Morgan wrote:

- quote -

Quiz your attorney about it. He might have to interface directly
with Fidelity to make sure everyone is on the same page.

MTW

A testimentary trust is the beneficiary of my 401(k) retirement account.
This was done by an attorney who specializes in such things. The trustee is
instructed to maintain the account as a retirement account, distributing
earnings and principal in ways I have specified, for quite a few years.

Fidelity, who administers the 401(k), has told me that such a non-spousal
beneficiary may not roll pretax money to an IRA, and the account must be
liquidated in full within six months of my death. I don't know whether
this is a Fidelity policy or the law.

I have not quizzed Fidelity or my attorney about this, but it seems to me
that, if the trust qualifies (as the attorney said it did), the trustee
could take possession of the account and place it in an IRA.

Any opinions?

Mike

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