[WSBAPT] Retirement account left to trust until age 35

[Brink, Kerry]

Hi Margaret,

If the trust is written as a conduit, then it can stretch over the child's lifetime and at the designated age, the trust terminates and the child remains the direct beneficiary.  The child can then continue pulling out the proceeds over the child's remaining lifetime.  If you want to talk about it further, feel free to give me a call.  Gair Petrie is guru in such matters and Natalie Choate's book is very helpful.  Maybe you know all that already, though.

Best regards,

Kerry E. Brink
Kerry E. Brink * Attorney

Estate Planning, Probate, Elder Law

Vandeberg Johnson & Gandara, LLP
PO Box 1315
1201 Pacific Ave Suite 1900
Tacoma, WA   98401-1315
www.vjglaw.com<http://www.vjglaw.com/>
kbrink at vjglaw.com
*Phone: 253.383.3791
7Fax:        253.383.6377
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Margaret Delp
Sent: Friday, February 19, 2016 4:10 PM
To: 'WSBA Probate & Trust Listserv'
Subject: [WSBAPT] Retirement account left to trust until age 35

Hello Everyone: I have a client who wishes to leave her entire estate, including IRA and 401(k) account, to a trust for her 2 children.  She wants the trust assets distributed outright to them when the youngest reaches the age of 35

MY QUESTION:  what happens to the Trust's IRA at the termination of the trust when the beneficiary reaches age X? For example, let's say a child is the beneficiary of a trust (that meets the 1.401(a)(9) look through rules) and the trust says that all the assets in the trust will be distributed to the child when he attains age 35. Would the IRA have to terminate and distribute all of the assets to the beneficiary at that time (resulting in a potentially significant tax liability at that time), or could the tax deferral (stretch) be allowed to continue by transferring the remaining IRA account to an inherited IRA in the name of the beneficiary when he attains age 3r - thus allowing continued withdrawals over the beneficiary's remaining life expectancy
Thank you!
Margaret
--
Law Office of Margaret Delp
2815 Howard Road, Second Floor
P.O. Box 292
Langley, WA 98260
(360) 579-4530 (telephone)
(360) 512-3114 (facsimile)

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