| An IRA owner can name an organization, an estate, or a trust as the account's beneficiary. These beneficiaries must transfer their Inherited IRA assets to an Inherited IRA. |
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| When the beneficiary is an entity or charity and the IRA owner was living on April 1 of the year after turning 70½, IRS minimum required distributions are based on the remaining life expectancy of the IRA owner as if s/he were still alive. If the owner was younger than 70½ when s/he died, the assets must be completely distributed by December 31 of the fifth year following the year of the IRA owner's death. |
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| When the beneficiary is a trust and the trust qualifies as an IRS-approved look-through trust, the trust's oldest beneficiary may then be deemed to be the IRA's designated beneficiary for minimum required distribution (MRD) calculation purposes and that beneficiary's life expectancy is then used in the calculation. To qualify as a look-through trust, the following criteria must be met: |
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Must be valid under state law |
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Must be irrevocable (or revocable while the IRA owner is alive, provided the trust becomes irrevocable upon the individual's death) |
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Must have named identifiable beneficiaries |
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Must provide the plan administrator with either a copy of the trust instrument or qualifying documentation of the trust |
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| Be sure to consult with a legal or tax advisor when inheriting IRA assets through a Trust arrangement. |
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