dmertz, thanks!. It seems to me because of the IRS Secure Act, pass through distributions to Beneficiaries must be made within 10 years or distributions from the IRA which aren’t distributed will remain in the Trust and be taxed at the much higher Trust tax rate.
I found this on the internet about the IRS Secure Act:
”Pulling Back on the Stretch IRA
Just as there are rules about RMDs during the IRA owner’s life, there also are rules about distributions from an inherited IRA after the owner dies. Historically, the preferred payout for an inherited IRA has been the “stretch IRA,” where the post-death RMDs are stretched out over the life expectancy of the new IRA beneficiary. This allows the IRA assets to continue to grow tax deferred, often for many years after the owner’s death. The SECURE Act, passed in December of 2019, the SECURE Act 2.0 of 2022, and subsequent Treasury guidance3, have significantly reduced the ability to create a “stretch IRA.” For most individual beneficiaries, IRAs inherited after 2019 are subject to a 10-year rule that requires the IRA to be completely distributed by December 31 of the tenth year following the year of the IRA owner’s death. The 10-year rule may or may not include RMDs during the ten years, depending on whether the deceased IRA owner had reached their RBD at their death.Non-individual beneficiaries such as an estate, charity or certain trusts, are usually subject to either a 5-year rule, which requires distribution of the entire IRA by December 31 of the fifth year following the IRA owner’s death, or the “ghost life expectancy” rule, in which RMDs are spread out over the deceased account owner’s remaining single life expectancy. In such cases, the 5-year rule applies where the account owner died prior to their RBD, and the “ghost life expectancy rule” applies where the account owner died after their RBD and therefore had been subject to RMDs.
Certain beneficiaries, known as “eligible designated beneficiaries” or EDBs, are not subject to the new 10-year limitation. EDBs include: the IRA owner’s surviving spouse, the owner’s children while they are under age 21, certain individuals who are chronically ill or disabled as of the date of IRA owner’s death, and any person who is not more than 10 years younger than the IRA owner. EDBs can generally still enjoy the benefits of a stretch IRA by taking RMDs over a period that could be as long as their lifetime.”
