April 9, 2012
Authored by: Kathy Sherby and Stephanie Moll
When a trust is named as the beneficiary of retirement benefits, there will be a designated beneficiary for purposes of the required minimum distribution (“RMD”) so long as the trust is a “look-through” trust, a trust that complies with the requirements set out in Reg. § 1.401(a)(9-4, A-5(b). If a trust is a “look-through” trust, the oldest countable beneficiary will provide the measuring life for purposes of the RMD. Determining the countable beneficiaries of a trust, and drafting to make sure the desired person is the oldest countable beneficiary, is complex and necessitates precise drafting. Most recently in PLR 201203033 the IRS has provided a detailed roadmap to be followed in making this determination.
In PLR 201203033, the decedent, whom we’ll call Bob, had created a revocable trust that created a Marital Trust, an Exempt Trust and a Primary Trust. Then in his beneficiary