Trust as Beneficiary
Unmarried man names his girlfriends trust as bene on his Roth IRA, 401K and 457 plan. No contingent beneficiaries. She wants to take life expectancy payments instead of the 5 pay. She is grantor and beneficiary of the trust. Can this be done?
Permalink Submitted by Alan Spross on Tue, 2009-10-27 22:08
At least one stumbling block for look through treatment is that the trust must be irrevocable or become so at the death of the participant (employee). If this is a basic RLT, it would not become irrevocable until the grantor’s death, not the death of the employee.
Permalink Submitted by Al Fry on Fri, 2009-10-30 14:48
In other words, if he wants her to get the IRA, why not name her as bene? Since she can revoke the trust at anytime anyway, I’m not sure what he would be accomplishing by making her trust the bene. Or, is it HIS trust for her benefit?