Avrum,
The rules changed in 2002.

Under Treasury Regulation 1.401(a)(9)-4, Q&A-5, when a trust is the
beneficiary of a retirement account and certain basic
provisions/requirements are met, the retirement account's "designated
beneficiaries" are considered to be the beneficiaries of the trust (the
so-called "look-through" trust treatment). Thus, the beneficiary's life
expectancy is used to determine the applicable distribution period for
post-death required minimum distributions.

Note that if there is a single trust with multiple beneficiaries, the
life expectancy of the OLDEST trust beneficiary controls (if you want
each beneficiary to withdraw based on his/her own lifetime, the
retirement account must name a SEPARATE trust for each beneficiary).

However, if the trust does NOT qualify for 'look-through' treatment,
then the life expectancy of the trust is considered to be 0 years,
which means the applicable distribution period is 0 and distributions
will be based on one of the other IRC Section 401(a)(9) provisions.

Respectfully,
- Michael E. Kitces, MSFS, CFP(r), CLU, ChFC

I may have been asleep at the switch but isn¹t naming a trust as the
beneficiary of either a 401k plan (if allowed by the plan) or a of a
conventional IRA is the equivalent of having a total distribution at
death (i.e. income tax is due on the total amount in one year

Has something changed
--
Avrum Lapin avrum113[at]earthlink.net
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