This video segment is the 2nd part of ‘What Can Cause Your Trust to Fail’ and focuses on estate planning options for retirement funds, including IRA’s and the IRA Inheritance Trust (c) by John Goralka, J.D., LL.M.
This is a communication for legal services from the Goralka Law Firm. Mr. Goralka is responsible for its contents….(read more)
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My understanding is a revocable living trust will allow for inherited IRA stretchout if the following is true:
1. The trust explicitly names the beneficiaries.
2. The trust becomes irrevocable on death of the grantor.
3. The trust was drawn by an attorney licensed in the state.
4. By October 30th of the calendar year following the death of the grantor, the financial institution holding the retirement assets is presented a copy of the trust and a death certificate.
Meeting the four conditions above will allow for the stretchout IRS option where the beneficiaries can receive a lifetime distribution based on an IRS table.
Unlike a dedicated IRA trust, what the revocable living trust cannot do is become an accumulation trust where it can bypass the IRS rules and accumulate money.