State Court Retroactive Change to IRA Beneficiary Not Given Tax Effect by IRS

A decedent had 2 IRAs. The death beneficiaries of the IRAs were trusts that qualified as “look through” trusts, such that the payout period for the IRAs after the decedent died could be computed using the life expectancy of the trust beneficiaries.

However, before he died, the decedent moved the IRAs to another firm, and entered into new paperwork that erroneously designated his estate as the death beneficiary. With the estate as beneficiary, the payout period for the IRAs could not be “stretched” under IRS regulations The decedent thereafter died…

Private Letter Ruling 201628004, July 8, 2016

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