Step IRA

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L1: Step IRAMy wife’s father passed in Oct 08 and his IRA’s transferred to his wife which now reside in both a survivor and exemption trust.When my wife’s mother passes, if there are funds in the IRA’s can these transfer to the daughter and be set up in another IRA to defer the time of paying income taxes?Thank you.2010-05-11 14:48, By: johnnyg, IP: []
L2: Step IRAIt might be possible for the mother to assume ownership or roll over the IRA balance for which the survivor trust is the named beneficiary and the mother is the sole beneficiary of that trust. Several IRS letter ruling have allowed that, and mother would then make the daughter the designated beneficiary of mother’s IRA.However, the exemption (aka B trust) is irrevocable and therefore cannot be terminated. The IRA for which this trust is the named beneficiary will have RMDs determined by the oldest trust beneficiary, and whoever is the successor trust beneficiary will have to continue the RMD schedule that applies to mother. 2010-05-11 21:25, By: Alan S., IP: []

L3: Step IRAI assume that the deceased had a professional draft the trust and its provisions. Usually he would have had the children as secondary beneficiaries, and the spouse could have “disclaimed”the inheritance of the IRA initially. Since that was not done by her, hopefully the children are the secondary beneficiaries already, and it will pass to them under the present trust upon herdeath.IRAs inherited by spouses can continue the deferral of distributions until reaching 70 1/2. Non-spousal beneficiaries MUST start to take distributions no later than the end of the year following the year of death. ( The non-spousal divisor is the factor at that time, and reduces by 1.0 each year thereafter.)2010-05-12 00:43, By: dlzallestaxes, IP: []