Trust as Beneficiary of Retirement Assets and the IRS Documentation Rules

AuthorSeymour Goldberg
ProfessionSenior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
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.

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