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Barrister
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 22569
Experience:  14 yrs estate law, real estate. Wills/Trusts/Probate
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My Aunt has an IRA worth 100K that she has left her trust has

Resolved Question:

My Aunt has an IRA worth 100K that she has left her trust has the beneficiary. The trust in turn has me and 4 other relatives as beneficiaries of her trust upon her death. Do you see any issue in the way this is setup? I was asked to look over it from her financial advisor and see if we want to keep it like this or change the trust to list all 4 of us individually. My aunt is 90 and dying and I really don't want to drag her through anything as far as financial changes unless it’s a big problem. Thanks!
Submitted: 10 months ago.
Category: Estate Law
Expert:  Barrister replied 10 months ago.
Hello and welcome! My name is XXXXX XXXXX X will try my level best to help with your situation or get you to someone who can.
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Do you see any issue in the way this is setup?
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No, I don't see anything legally improper or prohibited about having the trust be the beneficiary and then having the trust disburse assets to the beneficiaries.. It does seem to add an unnecessary step though because there is no reason why she couldn't simply name each of you as direct beneficiaries of the IRA in equal amounts...
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But there is nothing wrong about how it is now, just a little more complicated than is necessary.
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Thanks
Barrister
Customer: replied 10 months ago.

Maybe I am wrong on this but will the successor which is the financial company distribute the money to us in cash or will they roll it over to an individual IRA for each of us or will they keep it as one IRA and distribute the money to us out of the 100K. From what I been researching they keep mentioning something based on the oldest beneficiary. In my case I am 30 but the oldest is 60...

Expert:  Barrister replied 10 months ago.
Unfortunately the taxation and distribution of IRAs is not really one of my areas of expertise. But from what I understand, how the IRA is distributed would depend on the specific terms and whether the beneficiary wanted to take a lump sum distribution or roll it over into their own IRA. It it was cashed out, then there would be taxes deducted from it since it would have been tax deferred at the time that it was originally deposited.
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But I am pretty sure that it would never be kept as one lump sum and then paid out to four payees each month..
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This is proabably more of a tax question and I can tell you that we have some really sharp tax guys here on JustAnswer if you wanted to post it for them to comment on and give you a definitive answer...
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Thanks
Barrister
Customer: replied 10 months ago.

Do I close this question out and open a new one? Also would you be able to help me with exactly what I should ask?

Expert:  Barrister replied 10 months ago.
That would probably be best as the tax guys don't monitor Legal and vice versa.
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I would just set out the facts as you related them to me here and then just ask "what is the standard way that an inherited IRA is distributed or divided with multiple beneficiaries?"
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Thanks
Barrister
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 22569
Experience: 14 yrs estate law, real estate. Wills/Trusts/Probate
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