[WSBAPT] Issue with Testamentary Trust being the beneficiary of an IRA

[H Henson]

Jenna,



I second Jim's recommendation. I had a client with a similar issue.

Transfer the IRA to another provider that understands IRC 401. Once the IRA
is in the hands of a provider that understand IRC 401, the client can
again make the request.


The (revised) process is:
1) Move the account by means of a plan-to-plan transfer to an IRA
provider *that
permits such transfers*. (Fidelity is one of these; the link below also
lists a few other providers).

2) Once the account is moved to the new IRA provider, the (second) transfer
of the IRA, intact, to the beneficiaries of the estate or trust can then
take place. It may need to occur in a subsequent tax year - you'll want to
coordinate with a CPA, esp. if you have a current provider refusing to make
RMD now.

3) ask the last (second) IRA provider what, if any, time restrictions are
on a transfer to beneficiaries (ie Can it be done the same (tax) year? or
do you need to wait until following year). I can't recall, but I think
there is also a deadline involved for all transfers.


a link to additional information about the process

http://www.ataxplan.com/bulletinBoard/ira_providers.cfm






*Holly Henson, CPA*
*Attorney*
*PO Box 1555*
*Bellevue, WA 98009*
*phone (206) 203-3259
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On Wed, Jul 5, 2017 at 4:22 PM, James B. Dolan <jbdolan at jbdolan.com> wrote:

> Jenna:
>
>
>
> Consider transferring the IRA to another company.  I have run into this
> problem with Chase.  I do not recall the exact IRC (401 and/or 402) that
> permits a “pass through’ or “look through” the trust to the beneficiary.
> Despite having letters from two CPA’s explaining this, Chase still would
> not do it, so my client simply transferred the IRA to a different company
> and they did it (I do not recall which company that was).
>
>
>
> Good luck,
>
>
>
> Jim Dolan
>
>
>
> ===================
>
>
>
> *Jones Butler Dolan, PS*
>
> *www.jbdolan.com <http://www.jbdolan.com>*
>
> *www.jonesbutlerdolan.com <http://www.jonesbutlerdolan.com>*
>
>
>
> *Mount Vernon*
>
>
>
> P.O. Box 2784
>
> 415 Pine Street
>
> Mount Vernon, WA 98273
>
> Telephone: 360-336-2939 <(360)%20336-2939>
>
> Facsimile: 360-336-2949 <(360)%20336-2949>
>
>
>
> *Stanwood*
>
>
>
> P.O. Box 458
>
> 10027 - 269th Place NW (SR 532)
>
> Stanwood, WA 98292
>
> Telephone: 360-629-3833 <(360)%20629-3833>
>
> Facsimile: 360-629-6253 <(360)%20629-6253>
>
>
>
>
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com] *On Behalf Of *Jenna Brozik
> *Sent:* Wednesday, July 05, 2017 2:32 PM
> *To:* WSBA Probate & Trust Listserv
> *Subject:* [WSBAPT] Issue with Testamentary Trust being the beneficiary
> of an IRA
>
>
>
> List mates,
>
>
>
> Here is the scenario.  The mother died leaving everything to her son in a
> testamentary trust.  (not living trust).  According to the trust, he
> received 1/2 her assets when he turned 25 and the remainder of the trust he
> is to receive at age 30.
>
>
>
> He has now turned 30.  The mother listed his trust as the beneficiary of
> her IRA.  Now the company that runs the IRA is saying that since he is 30
> he is to receive all of the IRA (at once with all the tax consequences)
> because that is the language of the trust.  They have refused to roll it
> over into an IRA in his name and they have refused to continue to give him
> the minimum distributions.
>
>
>
> Does anyone have any suggestions?  There was already a probate which was
> closed last year.
>
>
>
> Thank you,
>
> Jenna Brozik
>
> Attorney at Law
>
> Prinz & Brozik PLLC
>
> 445 S Grand Ave
>
> Pullman, WA 99163
>
> (509)338-0908 <(509)%20338-0908> / (509) 338-3527 (fax)
>
> jennaprinzlaw at gmail.com
>
>
>
>
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