RDL: Trust Beneficiaries

[Kathleen Reynolds]

#3483

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Illustrates required distributions for cases where special qualifications for trusts are met.

Plan Profile

• Calculation year The year the analysis begins.
• Dec. 31 balance The plan balance as of the year end prior to the calculation year.
• Expected plan growth The growth rate you’d like to use to estimate how the plan will grow in future years. This is for illustration purposes only. The calculation has to be made each year based on the actual previous year end value.
• Plan type The illustration is for either IRA or Roth IRA plans.
• Deceased owner’s date of birth The owner’s date of birth can affect when required minimum distributions begin and distribution options available to beneficiaries.
• Owner’s year of death The year of death of the IRA owner.
• Did the owner die prior to April 1? If the owner’s death occurs in the first quarter of the year after the year the owner reached RMD age, select “Yes”. This question will only be visible if death occurred in the year following the year the owner reached RMD age.
• Oldest trust beneficiary date of birth The year of birth for the oldest beneficiary of the trust. If there is no human beneficiary of the trust, go back to the home page and select the Estate or Non-Designated Beneficiary calculator.
• Is Trust Beneficiary disabled or chronically ill For post 2019 deaths, beneficiaries who are disabled or chronically ill may take distributions over their life expectancy.
• Is Trust Beneficiary legal minor child of owner For post 2019 deaths, the IRA owner’s minor child may take distributions over their life expectancy up to the age of majority.
• Illustrate 10 Year rule using For beneficiaries who are subject to the 10-year rule, distributions can be illustrated as a lump sum in year 10 or as equal payments over 10 years based on the expected plan growth rate entered.

Trust qualifications as a designated beneficiary

• Does the trust meet the following requirements? Answer “Yes” or “No” after consultation with the client’s attorney. Only trusts that meet the requirements listed may qualify for “look through” status.
• Under the terms of the trust, were the assets divided immediately upon the owner’s death into separate trusts for each beneficiary? If, under the terms of the trust, it is to be divided immediately upon the owner’s death into separate trusts for each beneficiary, the stretch rule can apply separately to each disabled or chronically ill EDB.

General Screen Functions
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Distributions

Required Minimum Distributions (RMD) Calculations
SECURE Act of 2019
CARES Act of 2020
 

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