Step 2
Hide everything but the copy you just made. Go into the Character menu and bring up the Bone Tools window. Click on Refine. What this does is let you break one bone into two without breaking the chain.

Step 3
Click as close to the middle of the main bone as you can.

Step 4
Now click in the middle of the top bone.

Step 5
And now the middle of the bottom bone.

Step 6
Now we've got four "mini bones" that together are exactly the same length as the original forearm bone. And while we've got the Bone Tools window open, add some fins to the new bones so you can see them rotating easier.

Step 7
Right now each bone is linked to the one before it, but we don't want them linked together at all. So select all of them and click on the Unlink Selection button.

Step 8
Unhide everything and, with the new bones still selected, click on the Select and Link button.

Step 9
We want to link these bones with the forearm bone (Bone02). But since the forearm bone is buried inside the new bones it's easiest to bring up the Select By Name window and select Bone02 there. You can bring up the window by hitting the "h" key on the keyboard if you're using the default keyboard shortcuts.

Step 10
Now we're going to do a lot of wiring. Right-click on the IK Goal (IK Chain01), click on Wire Parameters on the pop-up menu, and navigate to the X Rotation controller.

Step 11
Then click on the first bone in the forearm chain and navigate again to the X Rotation controller.

Step 12
This is the wiring window. First click on the bottom arrow to tell Max that the control for these two objects is going from the IK Goal to the bone and not the other way around. Then type in the expression below:

(X_Rotation)-(degtorad(90))

Basically, we're telling this bone to use the rotation of IK Chain01 minus 90 degrees. Technically you could do without the "-(degtorad(90))" part and it will still work. This is merely a housekeeping thing to keep the forearm bone chain looking nice. Try it without that last part and you'll see that the bone rotates 90 degrees as soon as you hit the Update button. So that last part of the equation just tells Max to leave the bone where it is.

Step 13
Repeat steps 10 through 12, but change the expression as shown below:

(X_Rotation*.75)-(degtorad(67.5))

Now we're telling Max to rotate this bone 75% of IK Chain01's rotation. And again, the last part just keeps it from rotating to a different position.

Step 14
Repeat steps 10 through 12, but change the expression as shown below:

(X_Rotation*.5)-(degtorad(45))

Now we're telling Max to rotate this bone 50% of IK Chain01's rotation. As you can see, each bone is rotating less than the bone before it, which is exactly what we want.

Step 15
Repeat steps 10 through 12, but when you click on the last bone and the pop-up menu doesn't look like the other three exactly, don't freak out. Just look at the picture below to see where you need to go. And it's just because we copied the forearm bone in the beginning instead of making these bones from scratch. It's no big deal.

Step 16
When you get to the wiring window, change the expression as shown below:

(X_Rotation*.25)-(degtorad(22.5))

This bone will rotate very little, which is just what that part of your arm does when your wrist rotates.

Step 17
That's it. Now you can rotate the IK Goal and watch the both the hand and the forearm twist together.