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Guest bkkdude

ira to inherited ira status-rollover possible?

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Guest bkkdude

Article v. C. further direct the Trustee to "distribute the proceeds of the settlors bank IRA to the residual trust".

my banks trust department position is "From the plain language of "proceeds", the trust document directs a cash out of the IRA be4 it is transferred to the residual trust. the bank wants after tax money to go to residual trust . end result- large tax is due now.

do you agree with the banks interpretation of the top sentance. everywhere i read from private letter rulings and on seem to permit non-spouse beneficiaries to open inherited iras thereby keeping funds under the umbrella of the ira.

please ask if you need more info. im not a professional but have a real life situation.

PS. is the banks interpretation of the phrase " ira proceeds" even applicable in the context of my situation? just their definition seems strange.

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dude, it's not a text message, you can use complete sentences. My first reaction was "huh?"

But after reading it a couple of times, I'm inclined to think, no, just because the word "proceeds" is used, that doesn't direct the trustee to distribute the entire IRA immediately. "Proceeds" can be distributed over a long time, potentially. Whether that can be accomplished by passing the proceeds through to inherited IRAs is another matter; I don't know.

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Article v. C. further direct the Trustee to "distribute the proceeds of the settlors bank IRA to the residual trust".

my banks trust department position is "From the plain language of "proceeds", the trust document directs a cash out of the IRA be4 it is transferred to the residual trust. the bank wants after tax money to go to residual trust . end result- large tax is due now.

do you agree with the banks interpretation of the top sentance. everywhere i read from private letter rulings and on seem to permit non-spouse beneficiaries to open inherited iras thereby keeping funds under the umbrella of the ira.

please ask if you need more info. im not a professional but have a real life situation.

PS. is the banks interpretation of the phrase " ira proceeds" even applicable in the context of my situation? just their definition seems strange.

You have not provided enough information to answer the question.

1. For example why are the funds being transferred? e.g., is the IRA being terminated?

2. If yes under what authority? e.g., will, trust.

3. Who are the beneficaries of the trust? Are they individuals?

4. What is the bank's authority for making the decision to transfer the IRA proceeds? Is the bank the IRA trustee/custodian or the executor of the decedent's estate?

5. Have you contacted whoever drafted Article v.C to ask what the intent of the provision was?

In any event you should consult a tax advisor or estate planning attorney who will provide an authoritative answer. Just because a tax free transfer of an inherited IRA is permitted under PLRs from the IRS doesnt mean that it is allowed under the document that controls distributions from the IRA.

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Guest bkkdude

my thinking is that if my moms intent was just cash the darn thing out. the law yer would have said=liquidate deceased ira(kill it) and distribute ira proceeds to beneficiary. so clear and easy to understand....lol. ps i know to geta a real live lawyer and all that and in fact im gonna choose one from the atec organization and see what they say. too bad natalie choate doesnt do my area.........lol

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Guest bkkdude

more to story.

is it normal for trustees and custodians to wait till the 11 month claim period is over to start work on figureing out the end results of the trust. if i had known of the dire consequences of the trust could i have disclaimed my beneficiary interest in the trust and have my father become beneficiary-he being first in line without me. he could then have gone the spouse ira route. all this would have to have been done in a timely fashion of course-not a year after death. another tidbit. i asked the people working on my case if trust language and code conflict which rules? the response i got back was trust language trumps the code! ps.... is natalie choates claim that custodians jsut do wthaever they want to do a common occurence?

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