Legal Question in Wills and Trusts in California

My aunt passed. Problem: Her IRA account was left in her deceased son's name. The bank is offering to pay monthly installments to the beneficiares, delaying the release of other trust funds (sale of home/personal goods). That IRA funds involve a tax credit when deposited, the IRS expects taxes back on withdrawal of funds at lower income.

Question: If the IRA funds go into the irrevocable living trust, how does this affect the beneficiares and/or what is the IRS position on these funds? Does this affect the entire funds in the trust and affect the closure of the Trust?

Asked on 7/16/13, 5:49 am

1 Answer from Attorneys

Scott Jordan Dunning Law Firm

You are asking a complex series of questions that requires a much thorough review of the entire case. First of all, why is the bank only "offering to pay monthly installments to the beneficiaries"? Are the recipients listed as beneficiaries on the account? If so, the money would not be going to the trust account.

If the recipients withdraw from the IRA account, they would owe taxes on the money.

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Answered on 7/16/13, 10:05 am

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