@TS61 wrote:
Root problem of setting up the guardianship is that the account value is small-ish. Figure it will cost a somewhat significant part of the asset to execute. Here we're really only talking 2 years until we gain access so it might actually be cheaper to pay the penalty for late payment of the RMDs.
Go to your county court, or call the clerk's office and ask them about this. I have found court clerks to be incredibly helpful. You may be able to get yourself appointed guardian of your child's estate with a simple form and no attorney needed.
If the alternative is to not have any guardian appointed and wait for the child to turn 18, I would be very careful. Think about any RMDs that will be missed (especially the owner's RMD if they did not take it before they died, which is likely much larger than the child's RMD will be later. While the IRS may waive the RMD penalty for good cause, I don't know if "I didn't want to do the paperwork" would be good cause. Also, in order to get that waiver, you have to take all the RMDs at once, which might not be in the child's best interest.
i.e., suppose the child is 15, and misses 3 RMDs at age 15, 16, and 17. When they turn 18, they must take all the missed RMDs plus the RMD for the year they turn 18, before they can ask for the waiver. That might bump up their income and result in more tax (due to the kiddie tax) than if they only withdrew the minimum until they turned 19 or 24. Just think about it carefully.
