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While trusts can help distribute assets according to your wishes, they can also make things more complicated.

📌 How Trusts and Estates Inherit IRAs: When a trust or estate is named as the beneficiary of your IRA, it becomes the account owner after your passing, and distributions must follow specific tax rules

📌 New Rules for Required Minimum Distributions (RMDs): Under the SECURE Act, most beneficiaries must empty an inherited IRA within 10 years. However, some eligible beneficiaries can stretch distributions over their lifetime.

📌 Differing Rules for Trusts and Estates: These entities must follow either the “Five-Year Rule” or the “Life Expectancy Rule,” both of which are explained in this article

📌 What is a See-Through Trust? It allows IRA assets to pass directly to named human beneficiaries, instead of being taxed at the higher trust tax rates. To qualify, the trust must meet certain legal requirements.

📌 How Taxes Work on Inherited IRAs in a Trust: The tax treatment of the inherited IRA depends on the type of trust, whether it be an accumulation or conduit trust.

Keep in Mind: Before you make any decisions, it’s essential to consult with a financial or estate planning professional to ensure your beneficiary strategy aligns with your goals.