The complexity of federal income tax rules makes it difficult to decide, among other things, when or whether to take distributions, how much the distributions must or should be, and how to draft beneficiary designations, wills and trust documents.
Whether or not to convert a traditional IRA to a Roth IRA is a hot topic. A series of articles on the Dickey Law Firm Blog under the category "Roth Conversion" analyses the real costs or tax savings, if any, given hypothetical fact situations.
Designating a trust as beneficiary of a qualified plan or an IRAs presents challenges if the deferral of distributions is an objective. The minimum required distribution rules (MRDs) provide for that the distributions can be paid out over the life expectancy of an individual beneficiary.
If a trust is named as beneficiary, Treasury regulations require proper drafting of the trust or the result will be a much shorter distribution period than the life expectancy of the trust beneficiary. DLF Blog articles will discuss the MRD rules in relation to trust beneficiaries.