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Inherited IRA
Special Needs Trust (d)4(a)

Along with our Conservator & Trustee money management services, Oppenheimer & Co. Inc. is among the few firms that will act as custodian and domicile IRA’s inherited by a (d)4(a) special needs trust (SNT). One of our areas of expertise is the custodianship and management of these SNT accounts on a minimal fee basis (0.9% to 0.6% annually). Most importantly, our team will help ensure all of our clients are compliant with the Uniform Prudent Investor Act.

This is how it works:

Moving an inherited IRA to Oppenheimer is a regular IRA custodian to IRA custodian transfer from our perspective. Once the account is here, under the guidance of independent legal counsel, a person with a guardianship (or power of attorney) would instruct us to move from an incapacitated person’s inherited IRA to a SNT inherited IRA, we don’t move directly into the SNT. This step avoids immediate taxation that would occur if transferred directly into the SNT.

All this has to be completed within one calendar month as not to jeopardize the client’s eligibility for state Medicaid or Federal benefits.

If there’s no guardianship, it needs to be established. While we wait for that, if an RMD is required, we’ll accept a signature from the SNT trustee to move the RMD from the inherited IRA to an account at Oppenheimer for the SNT. Of course, we need all of the typical account documentation (client agreements, IRA application, a copy of the SNT, etc.)

I have included a link that visually shows the “3 step process”:

3 Step Process

We also need an IRA Distribution Form and a specially worded Letter of Instruction from the guardian which instructs us that, upon the advice of his/her independent legal counsel, he/she is instructing us to transfer the inherited IRA to the SNT inherited IRA. Please contact our team if you would like a copy of the Letter of Instruction language.

In addition to acting as custodian, domiciling, and managing these accounts, we can also help with reducing bonding costs by blocking and restricting accounts in court supervised cases.

Please feel free to use us as a resource.

Darryl J. Lynch, AIF ®
Managing Director – Investments

Peter C. Palumbo, AIF ®
Executive Director - Investments