Drafting IRA Beneficiary "See-Through" Trust Provisions

Meeting Complex IRS Rules to Qualify a Trust as a Conduit Trust or an Accumulation Trust

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Tuesday, July 11, 2017

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide estate planning counsel with detailed guidance on the drafting of “see-through” trusts that qualify as IRA beneficiaries under IRS regulations. The panel will thoroughly discuss the rules for measuring life expectancy for purposes of required minimum distributions (RMDs) and distributable net income (DNI) when using a look-through trust. The panel will explain provisions governing both “conduit trusts” and “accumulation trusts” and offer sample language for both trusts that will meet IRS standards.

Description

A valuable tool for protecting IRA assets as a component of estate planning is the use of a trust as an IRA beneficiary. These “see-through” trusts can provide valuable flexibility in a comprehensive estate plan, but also carry both income tax consequences and very strict IRS requirements for qualification. Estate planning counsel must know the detailed IRS rules in drafting these “see-through” trusts to meet requirements for RMDs and income accumulation.

IRA beneficiary trusts generally come in two types: “conduit trusts” and “accumulation trusts.” Conduit trusts are marked by specific requirements as to how to calculate required minimum distributions over the lifetime of specified beneficiaries. Importantly, IRA beneficiary trusts are drafted as trusts (whether QTIP trusts or any other) that are valid under state law but contain specific language and provisions that qualify the trust for see-through treatment.

Whether estate counsel is drafting a trust to function as a conduit trust or an accumulation trust, practitioners must know the rules and required language in order to avoid serious tax consequences.

Listen as our experienced panel provides detailed guidance, including sample language, to help you master the intricacies of drafting see-through IRA beneficiary trusts.

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Outline

  1. Trusts as beneficiaries of IRA
  2. “Stretch” treatment of RMDs within a look-through trust
  3. Conduit vs. accumulation trust
  4. DNI impact and considerations
  5. Drafting provisions for conduit trusts
  6. Drafting provisions for accumulation trusts

Benefits

The panel will review these and other key issues:

  • Income tax considerations in utilizing a see-through trust
  • What provisions must be included in trust language for a trust to qualify for see-through treatment as either a conduit trust or an accumulation trust
  • Special factors to consider when drafting a QTIP trust as an IRA beneficiary trust

Faculty

Altman, Gary
Gary D. Altman

Principal and Founder
Altman & Assoc.

Mr. Altman's practice focuses on estate planning. He is a nationally recognized estate, legacy and business...  |  Read More

Kristen M. Lynch
Kristen M. Lynch

Partner
Lubell Rosen

Ms. Lynch represents clients in matters related to probates, guardianships, estate planning, asset protection,...  |  Read More

Owen Kaye, Esq.
Owen Kaye, Esq.

Givner & Kaye

Mr. Kaye has prepared hundreds of family limited partnerships, qualified personal residence trusts, grantor retained...  |  Read More

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