Transferring IRAsTransferring IRAs
It's often necessary or simply desirable to terminate an estate or trust in favor of its beneficiaries. Problems arise when that estate or trust is the beneficiary of an individual retirement account (IRA) and termination should occur before all the IRA benefits must be withdrawn. Many fiduciaries would like to transfer that IRA to the trust's or estate's beneficiaries, thereby keeping the scheduled
Michael J. Jones, partner, Thompson Jones LLP, Monterey, Calif.
It's often necessary or simply desirable to terminate an estate or trust in favor of its beneficiaries. Problems arise when that estate or trust is the beneficiary of an individual retirement account (IRA) and termination should occur before all the IRA benefits must be withdrawn. Many fiduciaries would like to transfer that IRA to the trust's or estate's beneficiaries, thereby keeping the scheduled distributions and avoiding the tax that a lump-sum distribution would incur. But many financial institutions flatly refuse to allow such transfers. Some seem to think it is illegal. It most assuredly is not. The Internal Revenue Service should make clear that such transfers are le...
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