Legal Question in Wills and Trusts in California

I , John Doe, am named as beneficiary of ABC Family irrevocable Trust. There is an IRA at local bank that names the ABC Trust as its beneficiary. The holder of the IRA needs to make funds payable to the ABC Family Trust and not to me, John Doe, even though I am designated as a trust beneficiary. They want me to set of an ABC Trust Savings account with a tax id number and then they will make funds payable to that account. How is this done?

Asked on 9/10/14, 11:17 pm

1 Answer from Attorneys

Julie Mains Mains Law Office

Yes. This sounds like typical trust administration after a person's death. If done properly, the IRA owner would have listed a specific person as the beneficiary. If they listed the Trust, then it must be paid to the Trust creating a taxable event out of the IRA. When a person has a revocable trust, where their social security number is used as the tax ID and the Trust becomes irrevocable at death, a new tax id number for the Trust must be pulled from the IRS. Then the account is opened, the bank issued the tax form showing that the IRA was paid out to the Trust and the Trust will file a Trust return claiming that income. The Trust will then distribute the net to the beneficiary or whatever the Trust dictates for distribution.

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Answered on 11/18/14, 2:33 pm

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