advertisement
Oct 1, 2010 12:00 PM
Correcting Unfavorable Beneficiary Designations in Trusts
PLR prevents post-mortem reformations of trusts as designated beneficiaries of IRAs
Taxpayers commonly name trusts as beneficiaries of their individual retirement accounts. If the trust is properly drafted, it will qualify as a designated beneficiary under Internal Revenue Code Section 401(a)(9), making it possible to stretch payouts over the life expectancy of the oldest trust beneficiary to maximize tax deferral. If the trust isn't properly drafted, however, the IRA will have no designated beneficiary and will have to be paid out over the decedent's ghost life expectancy or within five years after the decedent's death.
Historically, it was relatively easy to fix a trust that failed to qualify as a designated beneficiary because of a drafting error. This could be accomplished through (1) disclaimers by unwanted trust beneficiaries, (2) payouts to unwanted trust beneficiaries, or (3) post-mortem trust reformations. Recently issued Private Letter Ruling 201021038 reminds planners that the Internal Revenue Service will no longer permit post-mortem reformations.
Sign in to
view the full article
Not a subscriber?
Subscribe & Save
Get immediate access to Trust & Estates onlineSubscriber Benefits
Learn more about Trust & Estates magazine, online article access and our free enewsletters.
Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
Poll
Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
advertisement
T&E eNewsletters
Wealth Watch 
Wealth Watch is a free e-newsletter delivered twice a month with expert advice on wealth management from Trusts & Estates.
Latest from Wealth Watch
Tech. Review
Technology Review is a free monthly e-newsletter from Trusts & Estates and nationally renowned expert Donald H. Kelley. It is geared to keeping estate planning lawyers current on the latest tech news they can use.
Latest from Tech. Review
Philanthropy Tax Guide
Each month, Conrad Teitell reports on and analyzes as important tax development governing charitable contributions, including how to maximize the benefits and avoid the pitfalls.
Latest from Conrad Teitell
2011 Trust Glossary
Click here to download the 2011 Trust Glossary
50 Years Ago This Month
| 50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb. |
Conrad Teitell's Guide to Tax Benefits For Charitable Gifts
Click here to view the most up to date guide (September 2011)
Press Releases
advertisement
advertisement
