RMD Calculations - re Pub 590

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GG
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RMD Calculations - re Pub 590

Post by GG » Wed Feb 18, 2009 12:11 pm

If husband and wife are more than 10 years apart they can use the calculated life expectancy table II for RMDs and take "advantage" of the age difference. That is only true if the spouse is the sole primary beneficiary.

However, my father's advisor is telling him that becuase he has language in his beneficiary designation that states something to the effect of...

My wife is primary unless she disclaims all or a portion to my disclaimer trust, etc, etc...

...that because she can disclaim to the disclaimer trust, that the trust has a primary interest, and therefore she's not really the sole belenficiary and he would have to use table III, the uniform table.

I can't argue it one way or another and have to trust the professionals, but still want to make sure he's getting the right info.

Any ideas?

Thanks
GG

chaz
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Post by chaz » Wed Feb 18, 2009 2:29 pm

Pub 590 is official. Follow it carefully so you don't get a problem with IRS. If you are unsure, contact a CPA or tax lawyer.

Good luck.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page

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plannerman
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Post by plannerman » Wed Feb 18, 2009 3:55 pm

I don't know the answer to this. But it doesn't sound right to me, because every IRA beneficiary has the right to disclaim.

Steve

GG
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Post by GG » Wed Feb 18, 2009 4:20 pm

plannerman wrote:I don't know the answer to this. But it doesn't sound right to me, because every IRA beneficiary has the right to disclaim.

Steve
That's exactly what I said. However if mom is listed as the primary without any auxilary language and then disclaims , then it would go to the contingent beneficiaries (us kids), yes? But the designation for the primary states by direct quote that whatever is disclaimed goes to the trust which has different instructions. So the argument is that the trust is now a primary benefiary. I don't know.
chaz wrote:Pub 590 is official. Follow it carefully so you don't get a problem with IRS. If you are unsure, contact a CPA or tax lawyer.
Well, that much I obviously know.

Pub 590 is clearly quiet on any meaningful details about many topics like this. And I've asked 2 estate planning attorneys so far who have given less than consistent and confident advice.

Ken Reckers
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Post by Ken Reckers » Wed Feb 18, 2009 6:28 pm

You probably know this, but just in case, I have had good luck asking trust and RMD questions on fairmark.com (suggested to me from here).

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BruceM
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Post by BruceM » Thu Feb 19, 2009 1:08 pm

I don't know either why a 'disclaimer trust' would be necessary, unless the contingents are minors or its some kind of spend-thrift trust for adults contingents of questionable competence...and the only way to fund it if the primary disclaims must be by so titling the primary????

But on the other end, will it really make that much difference in the RMD amount if the uniform table is used instead of table III?

BruceM

GG
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Post by GG » Thu Feb 19, 2009 8:26 pm

BruceM wrote: But on the other end, will it really make that much difference in the RMD amount if the uniform table is used instead of table III?

BruceM
15 yr age gap over 10 or 15 yrs certainly is worth some leg work to find the answer on a $3M IRA

GG
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Post by GG » Thu Feb 19, 2009 8:29 pm

BruceM wrote:I don't know either why a 'disclaimer trust' would be necessary...

BruceM
It's removed from the estate for estate tax, but can still provide benfits to the surving spouse according to the terms of the trust

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