Trust as Beneficiary of Retirement Assets and the IRS Documentation Rules

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
• Pages: 101-105

101

TRUST AS BENEFICIARY

OF RETIREMENT

ASSETS AND THE IRS

DOCUMENTATION

RULES

On April 17, 2002, the IRS released f‌inal regulations regarding the use

of trusts as the benef‌iciary of plan benef‌its and / or IRAs for purposes of

determining required minimum distributions.

The Reg. §1.401(a)(9)- 4, A- 5 provides in part as follows:

(a) If the requirements of paragraph (b) of this A- 5 are met with

respect to a trust that is named as the benef‌iciary of an employee

under the plan, the benef‌iciaries of the trust (and not the trust

itself) will be treated as having been designated as benef‌iciaries

of the employee under the plan for purposes of determining the

distribution period under section 401(a)(9).

(b) The requirements of this paragraph (b) are met if, during any

period during which required minimum distributions are being

determined by treating the benef‌iciaries of the trust as desig-

nated benef‌iciaries of the employee, the following requirements

are met:

(1) The trust is a valid trust under state law, or would be but

for the fact that there is no corpus.

(2) The trust is irrevocable or will, by its terms, become irrevo-

cable upon the death of the employee.

(3) The benef‌iciaries of the trust who are benef‌iciaries with

respect to the trust’s interest in the employee’s benef‌its are

identif‌iable . . . from the trust instrument.