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- Written by: DENNIS FORDHAM
A trust cannot own a retirement account — such as an IRA or 401(k) — but it can be named as a death beneficiary.
Until 2020, individuals receiving distributions from a retirement plan as a death beneficiary, either directly or as a beneficiary of a trust could expect to take annual taxable income distributions stretched out over their own lifetime; the stretch-out provided both tax deferred growth and income tax savings.
In 2020 the so-called, ”Setting Every Community Up for Retirement Enhancement,” or “SECURE,” Act of 2019 greatly reduced who was eligible for such benefits.
A limited pool of death beneficiaries, i.e., so-called, “eligible designated death beneficiaries,” or EDBs, now continue to receive the so-called “stretch out” lifetime death “required minimum distribution,” or RMD, payments (i.e., over the beneficiary’s lifetime).
EDBs include a surviving spouse, a disabled or chronically ill person, a minor child of the retirement plan participant, and a person who is not more than ten years younger than the plan participant or owner.
All other individual death beneficiaries who are not EDBs are called designated beneficiaries. A designated beneficiary must receive his RMD distributions over a 10-year period by which time everything must be fully distributed.
In 2022, the Internal Revenue Service issued new proposed regulations that now also require annual RMD distributions for designated beneficiaries within the 10-year period.
Designating a trust as beneficiary should only occur after careful estate planning regarding current “RMD” rules: Will the trust qualify as a designated beneficiary for maximum tax deferred RMD distributions under the IRS rules, and, if so, what annual RMDs and what final distribution year rules might apply.
If the trust itself does qualify as a designated beneficiary then the RMD rules depend on whether the individual trust beneficiaries are designated beneficiaries and/or EDBs.
Otherwise, if the trust is not a designated beneficiary, such as because it has a beneficiary who is not an individual (e.g., a charity), then either more or usually less favorable RMD rules apply.
Thus, what is at stake is preserving either the EDBs lifetime stretch out or the designated beneficiaries 10-year distribution period, as relevant.
Generally, it is best to name individuals as death beneficiaries to retirement plans. This avoids unintended income tax consequences associated with having a trust as beneficiary.
A trust should only be named as a death beneficiary to a retirement account when there is a good reason, such as, (1) the beneficiary is a disabled or incapacitated person receiving needs based government benefits; (2) the beneficiary is a minor; (3) the beneficiary has creditor problems; and (4) the trust has a complex distribution scheme.
Whether a trust qualifies as a designated beneficiary is determined at the retirement plan participant or owner’s date of death. First, does the trust satisfy the four so-called “see through” rules to allow the trust to qualify as a designated death beneficiary? This is rarely an issue (except infrequently when all trust beneficiaries are not identifiable).
Second, the trust itself must, for RMD purposes, be categorized as either a, “conduit trust” or as an, “accumulation trust.”
A “conduit trust’ is one that requires that, “all receipts of income from a retirement plan received by the trustee must be distributed in the same tax year either to or for benefit of the beneficiary.”
Any other trust is an “accumulation trust” which may accumulate retirement account distributions.
Third, all individual trust beneficiaries must be identified and listed, each beneficiary then be categorized as either a countable or a disregarded beneficiary when applying RMD rules.
All persons who either must or may receive benefits following the death of a participant are countable. Any alternative (back-up) beneficiaries who only stand to inherit if some other beneficiary dies, are secondary and may sometimes be disregarded for applying RMD rules.
Every listed beneficiary who either must or who may receive a benefit from the trust counts when applying RMD rules.
Secondary (alternative) death trust beneficiaries, i.e., who might receive benefits if a primary intended beneficiary were to die, are sometimes disregarded. With a conduit trust any secondary (alternative) death beneficiary is disregarded.
Fourth, if a trust is named a beneficiary and the trust is not an ongoing conduit trust or an ongoing accumulation trust but distributes assets outright to trust death beneficiaries at the settlor’s death, then unless one or more disabled or chronically ill trust beneficiaries are involved, each countable individual trust beneficiary is considered when determining a single annual RMD rule for all trust beneficiaries.
However, if a disabled or incapacitated trust beneficiary is involved, the new 2022 regulations provide that each trust beneficiary is considered separately as if each beneficiary had been named individually instead of naming the trust.
The annual RMD rules are then applied separately to each beneficiary’s share so long as one or more disabled or chronically ill trust beneficiaries are involved.
Thus, for example, if one trust beneficiary is a disabled or chronically ill EDB they can inherit their share of the decedent’s IRA subject to their EDB lifetime stretch-out annual and final year distribution RMD rules and any other beneficiary who is an ordinary DB will inherit subject both to the designated beneficiary’s 10-year final distribution and annual RMD rules.
Dennis A. Fordham, Attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at
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- Written by: Jeanette Kazmierczak
Using NASA’s Neil Gehrels Swift Observatory, which launched in 2004, scientists have discovered a black hole in a distant galaxy repeatedly nibbling on a Sun-like star.
The object heralds a new era of Swift science made possible by a novel method for analyzing data from the satellite’s X-ray Telescope, or XRT.
“Swift’s hardware, software, and the skills of its international team have enabled it to adapt to new areas of astrophysics over its lifetime,” said Phil Evans, an astrophysicist at the University of Leicester in the United Kingdom and longtime Swift team member. “Neil Gehrels, the mission’s namesake, oversaw and encouraged many of those transitions. Now, with this new ability, it’s doing even more cool science.”
Evans led a study about the unlucky star and its hungry black hole, collectively called Swift J023017.0+283603 (or Swift J0230 for short), which was published on Sept. 7 in Nature Astronomy.
When a star strays too close to a monster black hole, gravitational forces create intense tides that break the star apart into a stream of gas. The leading edge swings around the black hole, and the trailing edge escapes the system.
These destructive episodes are called tidal disruption events. Astronomers see them as flares of multiwavelength light created when the debris collides with a disk of material already orbiting the black hole.
Recently, astronomers have been investigating variations on this phenomena, which they call partial or repeating tidal disruptions.
During these events, every time an orbiting star passes close to a black hole, the star bulges outward and sheds material, but survives. The process repeats until the star loses too much gas and finally breaks apart.
The characteristics of the individual star and black hole system determine what kind of emission scientists observe, creating a wide array of behaviors to categorize.
Previous examples include an outburst that occurred every 114 days, potentially caused by a giant star orbiting a black hole with 78 million times the Sun’s mass. Another recurred every nine hours around a black hole with 400,000 times the Sun’s mass, likely caused by an orbiting stellar cinder called a white dwarf.
On June 22, 2022, the XRT captured Swift J0230 for the first time. It lit up in a galaxy around 500 million light-years away in the northern constellation Triangulum. Swift’s XRT observed nine additional outbursts from the same location roughly every few weeks.
Evans and his team propose that Swift J0230 is a repeating tidal disruption of a Sun-like star orbiting a black hole with over 200,000 times the Sun’s mass. They estimate the star loses around three Earth masses of material on each pass. This system provides a bridge between other types of suspected repeating disruptions and allowed scientists to model how interactions between different star types and black hole sizes affect what we observe.
“We searched and searched for the event brightening in the data collected by Swift’s Ultraviolet/Optical Telescope,” said Alice Breeveld, a research fellow at the University College London’s Mullard Space Science Laboratory (MSSL) who has worked on the instrument since before the satellite launched. “But there wasn’t any sign of it. The galaxy’s variability was entirely in X-rays. That helped rule out some other potential causes.”
Swift J0230’s discovery was possible thanks to a new, automated search of XRT observations, developed by Evans, called the Swift X-ray Transient Detector.
After the instrument observes a portion of the sky, the data is transmitted to the ground, and the program compares it to previous XRT snapshots of the same spot. If that portion of the X-ray sky has changed, scientists get an alert. In the case of Swift J0230, Evans and his colleagues were able to rapidly coordinate additional observations of the region.
Swift was originally designed to study gamma-ray bursts, the most powerful explosions in the cosmos. Since the satellite launched, however, scientists have recognized its ability to study a whole host of celestial objects, like tidal disruptions and comets.
“Swift J0230 was discovered only about two months after Phil launched his program,” said S. Bradley Cenko, the mission’s principal investigator at NASA’s Goddard Space Flight Center in Greenbelt, Maryland. “It bodes well for the detector’s ability to identify other transient events and for Swift’s future exploring new spaces of science.”
Goddard manages the Swift mission in collaboration with Penn State, the Los Alamos National Laboratory in New Mexico, and Northrop Grumman Space Systems in Dulles, Virginia. Other partners include Leicester, MSSL, Brera Observatory in Italy, and the Italian Space Agency.
Jeanette Kazmierczak works for NASA’s Goddard Space Flight Center in Greenbelt, Maryland.
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- Written by: Elizabeth Larson
The 303-page report, released in July, includes 14 final reports on various topics.
The report can be downloaded here.
The grand jury can require responses from agencies on its findings.
This year, for two of its investigative topics, “Sex Trafficking: Hiding in Plain Sight” and “America Is Bleeding: School Shootings,” the grand jury required the Clearlake Police Department to respond.
Responses for both of those reports also are required from all of the county’s school districts, the Lakeport Police Department and the Lake County Sheriff’s Office.
Clearlake Police Chief Tim Hobbs was the first public official to offer a response to the report.
Hobbs thanked the grand jurors for their efforts in completing the report, noting it was very detailed and contained a lot of good information.
He said he appreciated the grand jury’s willingness to meet with the police department and learn about challenges and opportunities regarding those two subjects.
Findings for the sex trafficking report were:
1. Human/sex trafficking cases are complex, require lengthy investigations, involve multiple agencies across county, state and country boundaries, and are costly to resolve.
2. Lake Family Resource Center has developed detailed training materials on trafficking.
3. Widespread education on trafficking, especially among youths and persons working with youths, can increase awareness and opportunities for potential intervention.
Hobbs said the police department agreed with all but one of the findings in the report. He said they had a disagreement on a minor point in the first finding; Hobbs said such cases don’t always involve multiple agencies.
The grand jury recommended that the Clearlake Police Department provide annual training on trafficking for their officers and staff, which Hobbs said they do. He said his agency sends staff members to more advanced training when possible.
The school shootings report had six findings:
1. School shootings are still relatively rare, but have been increasing since 2017.
2. The guns used in school shootings usually come from the student’s or a relative’s home.
3. School violence is not uncommon at athletic events.
4. SROs [school resource officers] benefit from specialized training focusing on nonviolent communication, with youths’ social and emotional development.
5. Single entrances and metal detectors at campus entrances are helpful in screening for weapons.
6. School officials’ outreach to parents/guardians to sensitize them to worrisome changes in students’ behavior can help identify at-risk students needing intervention.
There were several recommendations regarding school shootings included, but only two applied to police: That school district officials and law enforcement officers include athletic events in their active shooter response plans and that school district officials hire school resource officers and provide them with specialized training to better understand adolescent development and nonviolent communication.
Hobbs said those recommendations have been implemented.
On July 20, the city entered into a memorandum of understanding with Konocti Unified School District to provide a full-time school resource officer.
Hobbs said that officer attended a course and learned about the issues mentioned in the grand jury report a week before school started in August.
Jim Cyr of Kelseyville, who acted as recording secretary and committee chair for last year’s grand jury and is the foreman for the newly seated 2023-24 grand jury, was in the audience and thanked Hobbs.
The council voted unanimously to approve Hobbs’ proposed response and direct City Clerk Melissa Swanson to send it to the Lake County Superior Court.
In other business on Thursday, the council presented proclamations declaring Sept. 22 as Native American Day and another declaring September 2023 as Senior Center Month, held a public hearing to adopt Resolution 2023-39 renewing Ordinance 261-2022 and the approval of the Clearlake Police Department Military Equipment Report, and awarded a $626,425 contract to Pavement Coatings for the 2023 Double Chip Seal Project.
Email Elizabeth Larson at
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- Written by: Elizabeth Larson
The Creek fire began Wednesday afternoon in the area of Highway 29 and Clayton Creek Road, south of Lower Lake.
Cal Fire said Thursday evening that the fire remained at 28 acres, with containment up to 85% by day’s end.
Firefighters remained on scene throughout the day.
At about 5:45 p.m., radio traffic indicated several more units were leaving, with incident command transitioning to a Cal Fire engine.
A cause for the fire has so far not been given.
Email Elizabeth Larson at