[WSBAPT] Gift of Traditional IRA to Juridical Entity

[David Faber]

Thank you Marcus. I think you and Heather make a lot of sense. I will plan
to follow that approach for this type of situation as it should help
simplify things for my clients and limit the likelihood of mix-ups that
would defeat the purpose of the qualified plan.

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

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On Tue, Jun 27, 2017 at 3:18 PM, Marcus Fry <mfry at lyon-law.com> wrote:

> David:
>
> Safest and best bet is to split the IRA into two IRAs now (the amounts
> don’t have to be equal, whatever % they want to allocate to charity is the
> % of the overall IRA they spin off into a new IRA).  Then you will have a
> IRA with the child trust as beneficiary and another with the charitable
> institution as beneficiary.  There are some “fixes” at death when you have
> both a charity and a trust as % IRA beneficiaries of one IRA, but it is
> easiest to deal with it now.  Clients can still pull equally from the
> IRAs.  In fact, I find clients have a tendency to alter their estate plan
> as the IRAs grow, i.e., withdraw more out of the charity IRA as it has
> performed better than anticipated and want to leave a lesser amount to the
> charity, and they don’t have to sign new beneficiary designations, which
> can get completed incorrectly, lost in transit, etc.
>
>
>
> Marcus J. Fry
>
> Lyon, Weigand & Gustafson, P.S.
> P.O. Box 1689
> Yakima, Washington  98907
> Telephone:  (509) 248-7220
> Facsimile:  (509) 575-1883
>
>
>
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> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com] *On Behalf Of *David Faber
> *Sent:* Tuesday, June 27, 2017 11:56 AM
> *To:* WSBA Probate & Trust Listserv
> *Subject:* [WSBAPT] Gift of Traditional IRA to Juridical Entity
>
>
>
> 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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