Legal Question in Wills and Trusts in California

If my sister and I keep an inherited IRA and split it, (oldest one is 63) we know we must take mandatory distributions. With regards to my Mother's estate, according to her living trust, there are 5 other beneficiaries that get a certain % of the entire estate. If we keep the IRA, how do beneficiaries get paid on this assset, as myself and my sister would have to pay taxes on the distributions. Can we deduct taxes out prior to paying the other beneficiaries? The estate does not have to go through probate and we are the trustees and executors of the will.

Thank You!


Asked on 2/01/11, 5:19 am

1 Answer from Attorneys
Michele Cusack Pollak & Cusack

If there were no beneficiaries listed for the IRA, it is part of the estate and must be collected by the executors (probably all deferred income tax paid out of the estate) and included in calculating the percentage to go to each beneficiary. If you and your sister were listed as beneficiaries of the IRA, it is not part of the estate, it does not affect the probate distributions, and you and your sister pay any taxes.

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Answered on 2/08/11, 3:47 pm


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