Trust as beneificiary and tax withholding

[Earl]

A guy dies

He is not married

He has a Trust as the beneficiary

Can the full value of the account be rolled to the Trust with no withholding (since, as there is no spouse, the benefit cannot be rolled over)?

What if he is married and has a Trust as a beneficiary? Since it could be rolled over are taxes required to be withheld?

Thanks

[Guest richardl]

I have been told, but do not have a source document, that the Trust can keep the funds in the IRA account but must take all distributions within 5 years.

[jevd]

See final regulations under 1.401(a)(9).

[mbozek]

Since the trust is a taxable entity under the IRC, the transfer of the proceeds will result in taxable income to the trust. There is no rollover from a qualified plan to an IRA of a non spouse.

[Earl]

and, so it seems, since there is no spouse a rollover is not an option so no withholding applies.

Thanks

[Guest Pensions in Paradise]

Even though a distribution is not eligible for rollover, it is still subject to withholding. See page 7.130 of the ERISA Outline Book (2003 edition).

[Appleby]

It depends on which withholding you refer to.

I think Earl is addressing the 20 % mandatory withholding ( for eligible rollover distributions from QPs),... this would not apply.

You (Pensions in Paradise) may be referring to the 10 percent withholding , which applies if the necessary waiver is not provided.

Reminder to self- Must get copy of ERISA Outline Book- especially since everyone keeps referring to it and seems to think it is such a great reverence tool

[Earl]

thanks - I was referring to the mandatory not the waive-able 10%. I need to be more precise.

(I have the book on cd but can't figure out how to do a search in it.... kind of frustrating...)