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

[Jenna Brozik]

Thanks everyone for their comments.  They were very helpful.

I will try to get the account transferred to a new IRA provider.

Jenna Brozik
Attorney at Law
Prinz & Brozik PLLC
445 S Grand Ave
Pullman, WA 99163
(509)338-0908 / (509) 338-3527 (fax)
jennaprinzlaw at gmail.com


On Wed, Jul 5, 2017 at 5:02 PM, H Henson <hhensoncpa at gmail.com> wrote:

> 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 <(206)%20203-3259>
> <https://mail.google.com/mail/u/0/#UNIQUE_ID_SafeHtmlFilter_>
> <https://mail.google.com/mail/u/0/#UNIQUE_ID_SafeHtmlFilter_UNIQUE_ID_SafeHtmlFilter_>
> <https://mail.google.com/mail/u/0/html/compose/static_files/blank_quirks.html#SafeHtmlFilter_>
> <https://mail.google.com/mail/u/0/html/compose/static_files/blank_quirks.html#SafeHtmlFilter_SafeHtmlFilter_>*
>
>
>
>
>
>
>
>
>
> 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.w
>> sbarppt.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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