solo 401k estate planning/tax planning; upon death scenarios??

[Curt Smith]

A scenario for some who have business succession planning, the business will live on past the death of one or both spouses (business joint ownership). The succession is to a manager named in a Living Trust that is a successor business LLC op agreement member. IE the Living Trust is a successor member of the LLC/Op Agreement. Which names 2 managers (people). There's an active business LLC/s-corp with a self administered solo 401k (from Advanta) with 2 sub accounts (his/hers).

There are no children as plan beneficiaries, just non profits, churches etc and the opposite spouse of course.

The wish is that the business lives on and provides on going benefits to the beneficiary churches etc.  The Living Trust handles this I believe for the taxible businesses.  Its the assets of the 401ks that are the question.

Simple scenario upon single death, the surviving spouse has the right to move the dead spouses 401k assets into their own 401k.  Q:  stepped up basis or not??

Complicated scenario I have no guesses for best tactic: dual/final death: all 401ks are distributed upon death. To where? I could name the LLC as beneficiary so that the Managers operate those assets along with prior taxible SFRs??? Stepped up basis or not? Then the taxes are handled via k-1's to Living Trust beneficiaries (churches and some people so a mix).

Having the Living Trust be the beneficiary of the 401ks seems ok but I think has more problems.  IE 35% trust tax on assets or is it just distributions?  How is taxes handled to the beneficiaries (churches and some people)?

My guess; Distributing 401k assets to the existing operating LLC smells like the better idea. The devil though is in the details? Thanks.

[John Underwood]

So I inherited part of my dad's IRA. The Solo401k is a retirement account.

The law changed recently, like right before my Dad passed away.

The law now requires that we fully liquidated my Dads IRA within 10 years of his death. There are no RMD's required during this 10 years. I can take out some each year or wait 9.9 years and take it all out then. I'll have to pay capital gains on the stepped up basis from the time I inherited the IRA. I don't have to pay any tax on the ROTH part of the IRA.

I imagine a Solo401k would follow these same rules. 

I believe a spouse would not have the 10 year requirement but the IRA could not be moved into the spouses IRA.

I'll follow to see if someone says anything different.