Q: Per will, my brother share went to a trust. I'm to oversee. 401k listed him as 1/2 beneficiary. Does this go to trust to
My dad passed away. I'm executor of the estate. My dad has us splitting everything (property & posessions) in roughly equal shares. However, my brother share is to go into a trust due to concerns of drug/alcohol issues. My dad appointed me to oversee trust for my brother as well. My question is my dad had a IRA (28,000) we are both listed as beneficiaries. Its to be split 50/50. However, does my brothers share have to go into the trust or does he get a check for 14,000. My dad thought since he did the trust that my brothers share would go into that. But, I was told differently by the IRA company. She said my brother will get his own check. My dad would have been so upset. He didn't want my brother getting a large amount of money without someone overseeing. I'm frustrated because the attorney my dad hired to do the will before dad passed didn't say anything about needing to address his IRA. So now it's looking like my brother gonna get this money & have no one to hold him accountable.
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A: Yes, if what you say is true, that the death beneficiaries of the IRA are you and your brother and not you and your brother’s trust, then he will receive his share outright and free of trust. But neither of you have to accept your shares all in one lump sum. You can roll your shares over to your own IRAs and just take out the minimum required distributions every year. That method usually saves on income taxes and allows continued growth. You should discuss your options in this regard with your financial advisor.
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