[WSBAPT] Complicated distribution scheme

[Katie Smith Patel]

Often on retirement account beneficiary designations, the contingent beneficiaries do not get anything unless all the primary beneficiaries are deceased.  I don’t know if any financial institutions allow bespoke beneficiary designations with complex contingencies.  If a trust is not otherwise being considered for this estate plan, the closest option would be to name H(80) N1(10) N2(10) as primaries and nieces’ children and charities as contingent.  And then make sure a power of attorney has power to make beneficiary designations that conform with client’s overall estate plan in case she is incapacitated at the time of her husband’s death, but if she has capacity, she needs to remember to update the distribution immediately on husband’s death to update the primary beneficiaries.

If a trust is created, it is important to ensure it qualifies as a see-through trust so that the individuals are taxed at their individual rates and not at trust rates and the RMD schedule is based on who the human recipients are.  Otherwise, you could inadvertently accelerate the distribution schedule and subject the distributions to compressed trust income tax rates.

Katie Patel
Paraclete Estate Planning, LLC
(541) 499-9085 (direct)
112 Genessee Street
Medford, OR 97504



From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Mark Anderson
Sent: Thursday, September 4, 2025 10:23 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Complicated distribution scheme

Off the top of my head, perhaps wife could create a trust and then name the trust as the beneficiary of the IRA.  The trust agreement would then lay out the distribution scheme.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock Street, Suite 209, PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
CONFIDENTIALITY NOTICE
This transmission is confidential and is intended solely for the use of the individual named recipient. It may be protected by the attorney-client privilege, work product doctrine, or other confidentiality protection. If you are not the intended recipient, or the person responsible to deliver it to the intended recipient, be advised that any dissemination, distribution, or copying of this communication is prohibited. If you have received this transmission in error, please immediately notify the sender via e-mail or by telephone at (253) 327-1750 that you have received the message in error, and then delete it. Thank you.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Ann Manley
Sent: Thursday, September 4, 2025 9:10 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Complicated distribution scheme

Wife has an IRA with a million dollars. She wants her primary beneficiaries to be her husband (80%), niece 1 or her children if any (10%) and niece 2 or her children if any (10%). If either niece is dead w/ no kids, $ goes to husband.

But if husband is deceased, she wants each niece's share to increase to 20%, and have the rest distributed to a list of charities.

Can that be done via beneficiary designation, or is there a better way? (Or is the answer for her to come up with a less complicated scheme?)

Her financial adviser is saying that she should name her sister as a beneficiary, and then her sister can give money to the nieces and charities. That seems wrong.

Thanks!

Ann Manley, Esq.
The Manley Law Firm, P.S., Inc.
PO Box 16324
Seattle, WA 98116
(206)292-3064 / (206)292-3914 fax
www.manleyfirm.com<http://www.manleyfirm.com>

The Manley Law Firm practice areas include Bankruptcy*, Estate Planning, Auto Accidents, Civil Litigation, Construction, Commercial and Contract Law, Personal injury, Small Business, Unemployment Claims, Wage Loss and Compensation claims

* The Manley Law Firm is a Debt Relief Agency. We help people file for bankruptcy relief under the Bankruptcy Code.

This email and any files transmitted with it are privileged, confidential, and intended solely to whom they are addressed. Any unauthorized use, copying, review or disclosure is prohibited. If you have received this communication in error, please immediately notify the sender.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20250904/2aced15d/attachment.html>