[WSBAPT] Gift of Traditional IRA to Juridical Entity

[David Faber]

List:

I'm trying to understand how much flexibility I can bake into a trust
arrangement for a client who wishes to leave a portion of their traditional
IRA to a nonprofit entity and the rest in trust to the client's child.
IRC  § 1.401(a)(9)-4 of course does not allow juridical entities as
possible contingent beneficiaries of a qualified retirement plan account,
but am I right in assuming that provided the client splits the QRP into
separate tranches at the time of their death, any portion that is directed
to an individual beneficiary (with proper contingent beneficiary language)
would be able to be stretched irrespective of the gift to the juridical
entity? Also, would you advise I have the beneficiary designation deal with
the carving up of the QRP directly or should I have the trustee tackle that
issue within the confines of trust instrument? I am leaning toward the
former, but understand that there are sometimes pitfalls around plan
administrators properly addressing the renaming and segregation of accounts.

Best,
David J. Faber
Faber Feinson PLLC
210 Polk Street, Suite 1
Port Townsend, WA 98368
(360) 379-4110

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