Happy Sunday!

I thought I’d talk about this as I seem to consistently get people checking in on us after talking to their CPA and or financial planner and being told you should not name your trust as the beneficiary on your retirement account because it messes everything up.

Before I get to the rules, though, I want to make one thing clear – we WANT your questions!

And, we want you to talk to and listen to the professionals in your life you trust.

Just make sure the person giving the advice has experience and knowledge in the thing they are talking about.

Okay, here are the quick and dirty inherited IRA distribution rules:

1. If the beneficiary of your IRA is your revocable trust it can be distributed in the exact same way as if an individual is named (these are “see-through trusts”) under the rules;
2. If the person that died was already taking required minimum distributions before they died the person inheriting the account will also need to take required minimum distributions (under the inherited person’s distribution schedule AND will have to make 100% distribution within 10 years.)
3. If the person that died was NOT already taking required minimum distributions before they died (i.e. they were younger than 73 when they died) there is no requirement to take required minimum distributions every year, but they will have to take 100% distribution within 10 years.

That’s it! Like I said, right to the point.

Have a great day!

Cheers,

Christopher Small
Founder/CEO
CMS Law Firm LLC

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