Who can be beneficiary
Non-Spousal Beneficiaries - Non-Living
Entities
This can be an advantage when trying to
control events after death. If the trust meets certain
requirements, the life expectancy of a trust beneficiary
may be used to calculate Required Minimum Distributions
after the IRA owner's death.
A trust would so
qualify if it meets the following criteria:
-
The trust is irrevocable or becomes irrevocable
no later than the death of the IRA owner
-
The trust is valid under state law
-
The trust has individuals as beneficiaries who
are identified in or from the trust document;
and
-
If a Trust is named beneficiary the Trustee
must provide certification by October 31st of
the year after the IRA owners death.
-
If an estate is named as beneficiary, the IRA may
have to go through probate.
-
-
If a non-living entity (e.g., a trust or estate) is
named as beneficiary and the IRA owner dies before
his or her Required Beginning Date (RBD), the IRA
must be distributed by December 31st of the fifth
year after the year of death.
If the IRA owner dies on or after the
RBD, the IRA may be distributed over the remainder of the
IRA owner's life expectancy using the IRA owner's age in
the year of death and the non-recalculation (term-certain)
method of calculating RMDs.
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