Estate Planning

[Original Wally]

Wally & Molly are planning our Estate. The Trust is all set up.
Here is the issue: We have an IRA in addition to our after-tax accounts.
REGULAR IRA, not a Roth. Shrug.


Molly is primary beneficiary and kids are contingent.
IF we both pass in a common accident, will THAT trigger any tax consequences? Or will the kids just pay the taxes on their individual distributions - over the new10 Year period.



NOTHING on our final tax returns, right?


(ALSO - No "Estate Tax" issue. We are (unfortunately) below the threshold for THAT to happen. Sigh)

 

[JBTX]

Wally & Molly are planning our Estate. The Trust is all set up.
Here is the issue: We have an IRA in addition to our after-tax accounts.
REGULAR IRA, not a Roth. Shrug.


Molly is primary beneficiary and kids are contingent.
IF we both pass in a common accident, will THAT trigger any tax consequences? Or will the kids just pay the taxes on their individual distributions - over the new10 Year period.



NOTHING on our final tax returns, right?


(ALSO - No "Estate Tax" issue. We are (unfortunately) below the threshold for THAT to happen. Sigh)

Are these adult children or minor children?

If adult children, yes there will be RMDs and depletion by year 10, and kids will be taxed when money is distributed from Ira.

If minor children, the rmd schedule will be a lifetime rmd schedule until they hit 18, then 10 years upon adulthood (I think). Also there are other issues with leaving an Ira directly to a minor.

If the IRAs went to your trust, then it becomes more complicated, and if not careful and not worded correctly may need to come out in 5 years

 

[pb4uski]

Wally & Molly are planning our Estate. The Trust is all set up.
Here is the issue: We have an IRA in addition to our after-tax accounts.
REGULAR IRA, not a Roth. Shrug.


Molly is primary beneficiary and kids are contingent.
IF we both pass in a common accident, will THAT trigger any tax consequences? Or will the kids just pay the taxes on their individual distributions - over the new10 Year period.



NOTHING on our final tax returns, right?

(ALSO - No "Estate Tax" issue. We are (unfortunately) below the threshold for THAT to happen. Sigh)

No.Yes.Yes.