Please be open to feedback and constructive criticism from others, and consider their suggestions and advice when making decisions or forming opinions.
- Manlobbi
Personal Finance Topics / Retirement Investing
No. of Recommendations: 2
So I'm the named person on 1poormom's trust. She doesn't look like she's going to last much longer (stroke last week). Though she did eat a bit last night (first time in over a week!!), so that's good.
But it got me wondering. She has to take RMDs. Whenever she passes, I don't have to take them. How is that handled? Does her trust still have to take the RMDs? Is it better (or even possible) to merge her trust with ours (or liquidate her trust assets and deposit them in ours)?
It may seem a bit callous, but she wouldn't want me to be caught flat-footed over her finances. I have been content to manage them for her, make sure her bills are paid, her needs are met. The stroke was unexpected, so now I'm wondering what I need to do when she no longer has any bills.
No. of Recommendations: 1
Google is your friend here.
There is an IRS publication I read recently that laid it all out in great detail. There is either an RMD or a 10-year period for required withdrawals.
No. of Recommendations: 3
Google is my friend as long as I can phrase my question in just a few words.
But it looks like any retirement accounts in the trust need to abide by the 10-yr rule. Though, thinking about it, she's 90. If she was supposed to burn through it in 10 years, that was almost 20 years ago when she would have started. I'll have to look more closely. A lot of things are happening automatically (we set it up that way) so I wouldn't have to worry about it.
I also need to check whom is the beneficiary...the trust or me. Different rules for each.
No. of Recommendations: 1
I don't know how things work with a trust but if it was a simple inheritance from a parent to a child you do have to ensure RMDs are made in the year of the person's death.
Then you have to take RMDs from inherited IRAs based on your age. And then the account has to be fully transferred from its tax friendly state by the end of year 10.
The IRS confused people with this and they haven't enforced penalties for people who didn't do this in 2022 and 2021. I've been told the IRS is supposed to finally published rules on this by the end of CY2023 but we'll see.
For now I just plan to start taking withdrawals and will take most of them over the next 5-6 years where my income should be the lowest.
Now idea what rules apply to a trust. I once had one but my current attorney didn't see any reason to keep it once I got married. We had no children so things might be simpler.
Rich
